In the USA, 8 years in prison were requested for withdrawing $110 million from a DeFi protocol. Details

The New York prosecutor requested 6.5 to 8 years ( from 78 to 97 months ) in prison for Abraham Eisenberg. In 2022, he withdrew $110 million from the DeFi platform Mango Markets, but without hacking its code, instead exploiting a vulnerability in the economic logic of the protocol.

Eisenberg was trading futures on the MNGO token between two controlled accounts: selling from one and buying from the other, creating artificial trading activity and inflating the price. The inflated price of MNGO increased the value of his position, which he used as collateral to obtain loans in other cryptocurrencies on Mango Markets. He withdrew the funds from the platform.

Immediately after the withdrawal of funds in October 2022, Eisenberg openly wrote on social media about his actions, claiming that they were legal and represented a "highly profitable trading strategy" (highly profitable trading strategy). This phrase of his became a kind of meme in the crypto community.

Later, he voluntarily returned $67 million. Now Mango Markets is legally demanding the return of the remaining funds, despite the fact that in 2022 the Mango community voted to allow Eisenberg to keep $47 million.

In April 2024, Eisenberg was found guilty of fraud. The sentencing has been postponed several times and is now scheduled for May 1 of this year.

29-year-old Eisenberg had previously denied the fraud allegations. But the prosecution insists that he was aware of the illegality of his actions as he was fleeing.

Shortly after the deals with Mango, Eisenberg left Puerto Rico, where he lived, flying to Israel. When he returned to Puerto Rico in December 2022, U.S. agents arrested him. Since then, he has been in jail as the judge deemed that Eisenberg might flee.

The US Department of Justice also reported that Long Island resident Hugh Austin was sentenced to 18 years in prison for cryptocurrency fraud. The 62-year-old man and his son Brandon posed as crypto brokers and attracted $12 million from investors, mostly friends and acquaintances, for "investments in cryptocurrency." According to Decrypt, the son had previously been sentenced to four years in prison.