SEC v. AVRAHAM EISENBERG, No. 1:23-cv-00503, Southern District of New York (Jan. 23, 2023) — Complaint

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,

Plaintiff,
v.

AVRAHAM EISENBERG,

Defendant.

Civil Action No. 1:23-cv-503

Jury Trial Demanded

COMPLAINT

Plaintiff United States Securities and Exchange Commission (the “SEC”) for its
Complaint against Avraham Eisenberg (“Eisenberg”) alleges as follows:
SUMMARY
1. Eisenberg drained approximately $116 million from a crypto asset trading
platform known as Mango Markets after manipulating the trading price and volume of the
“MNGO token,” a so-called “governance token” of Mango Markets that was purchased and sold
as a crypto asset security.
2. Beginning on or around October 11, 2022, Eisenberg, using accounts on Mango
Markets he controlled, sold and contemporaneously purchased purported perpetual futures
contracts with respect to approximately 488 million MNGO tokens (out of approximately 500
million tokens in circulation).
3. Eisenberg then submitted and executed a series of large purchases of the thinly
traded MNGO tokens at incrementally higher prices, to artificially raise its price.
4. The trading volume on the day of Eisenberg’s manipulation was over 2,000%
higher than the average volume for the preceding ten trading days (and 2,018% higher than the

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average volume for the preceding 90 trading days), and Eisenberg’s transactions artificially
increased MNGO’s price on Mango Markets by more than 2,200%. These transactions also
increased the price of MNGO perpetual futures contracts by approximately 1,300%, significantly
increasing the value of Eisenberg’s long MNGO perpetual futures position.
5. The increased value of Eisenberg’s long MNGO perpetual futures position
allowed him to use that position as collateral to borrow and ultimately withdraw from the Mango
Markets platform approximately $116 million worth of various crypto assets – some of which
belonged to investors trading on the Mango Markets platform, thereby draining all available
assets from the platform.
6. After withdrawing the $116 million in crypto assets, Eisenberg stopped
manipulating the price of the MNGO token, which led to significant declines in the prices of
MNGO and MNGO perpetual futures contracts.
7. From the peak of Eisenberg’s manipulation of the MNGO token to the date of this
filing, the price dropped by approximately 90% in regular market trading, the volume plummeted
by approximately 80%, and the MNGO token became more illiquid, thereby harming investors.
8. Eisenberg perpetrated the attack on Mango Markets while in Puerto Rico, but
soon thereafter fled the country.
9. On December 26, 2022, Eisenberg returned to Puerto Rico and was arrested on
charges of commodities fraud and commodities manipulation in connection with the facts alleged
herein.
10. As set forth more fully below, the MNGO tokens Eisenberg purchased and
manipulated were purchased and sold as investment contracts and therefore as “securities” under
the federal securities laws.

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11. By engaging in the misconduct described here, Eisenberg violated numerous
provisions of the federal securities laws, including certain antifraud and anti-market
manipulation provisions, as detailed below.
NATURE OF THE PROCEEDING AND RELIEF SOUGHT
12. The SEC brings this action pursuant to the authority conferred upon it by
Section 21(d) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78u(d)].
13. The SEC seeks a final judgment against Eisenberg: (a) permanently enjoining him
from engaging in acts, practices, and courses of business alleged herein; (b) ordering him to
disgorge his ill-gotten gains and pay prejudgment interest thereon pursuant to Section 21(d)(3),
21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5), and (d)(7)];
(c) imposing civil money penalties on him pursuant to Section 21(d)(3) of the Exchange Act
[15 U.S.C. § 78u(d)(3)]; and (d) permanently enjoining Eisenberg from (i) participating, directly
or indirectly, in the purchase, offer, or sale of any security, or (ii) engaging in activities for
purposes of inducing or attempting to induce the purchase or sale of any security; provided,
however, that such injunction shall not prevent Eisenberg from participating in any employer
sponsored retirement plan offered pursuant to his employer, pursuant to Section 21(d)(5) of the
Exchange Act [15 U.S.C. § 78u(d)(5)].
JURISDICTION AND VENUE
14. The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and
Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
Defendant, directly and indirectly, has made use of the means or instruments of transportation or
communication in, and the means and instruments of interstate commerce or of the mails, in
connection with the transactions, acts, practices, and courses of business alleged herein.

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15. Venue is proper in this district pursuant to Section 27 of the Exchange Act
[15 U.S.C. § 78aa]. Defendant conducted certain transactions, acts, practices, and courses of
business constituting the violations alleged herein within this district, including transacting
MNGO tokens using a crypto asset trading platform with offices in this district.
DEFENDANT
16.  Eisenberg, age 27, is a U.S. citizen and is currently incarcerated at Metropolitan
Detention Center Guaynabo, Puerto Rico, awaiting transport to the Southern District of New
York. He is facing criminal charges of commodities fraud, commodities manipulation, and wire
fraud in United States v. Eisenberg, 1:23-cr-10 (S.D.N.Y.), and civil charges of violations of the
Commodity Exchange Act and regulations thereunder in CFTC v. Eisenberg, 1:23-cv-173
(S.D.N.Y.).
OTHER RELEVANT ENTITIES
17. Mango Markets (“Mango Markets”) is a crypto asset trading platform built on a
cryptographically secured ledger known as the “Solana blockchain.”
18. Mango Labs, LLC (“Mango Labs”) is a Wyoming corporation with its principal
place of business in San Francisco, California. Mango Labs was involved in the development of
Mango Markets.
19. Blockworks Foundation (“Blockworks Foundation” and, together with Mango
Labs, “Mango”) is a Panamanian entity with an unknown place of business. Blockworks
Foundation was involved in the development of Mango Markets.
20. Mango DAO (“Mango DAO”) is an unincorporated business entity with an
unknown place of business. Mango DAO is the governing body of Mango Markets.

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BACKGROUND ON CRYPTO ASSETS
21. The term “crypto asset” refers to an asset issued and/or transferred using
distributed ledger or blockchain technology, including assets sometimes referred to as “digital
assets,” “cryptocurrencies,” digital “coins,” and digital “tokens.”
22. A blockchain or distributed ledger is a database spread across a network of
computers that records all transactions in theoretically unchangeable, digitally recorded data
packages. The system relies on cryptographic techniques for secure recording of transactions.
23. Crypto assets are typically represented in one or more blockchains, meaning that
records of their ownership and transfer are stored on that particular digital ledger or blockchain.
24. Some digital assets may be “native tokens” to a particular blockchain – meaning
that they are represented on their own blockchain, though other digital assets may also be
represented on that same blockchain. Native tokens typically serve a number of technical
functions on a distributed ledger, such as helping secure the ledger from manipulation or other
forms of attacks. Like other “digital tokens,” native tokens may also be sold and traded for
consideration, including on secondary markets.
25. Examples of crypto asset blockchains include the “Bitcoin blockchain,” to which
the crypto asset known as Bitcoin is the native asset; the “Ethereum blockchain,” to which the
crypto asset known as ETH is the native asset; and the “Solana blockchain,” to which the crypto
asset known as SOL is the native asset.
26. In addition to trading activities that involve purchases and sales of one crypto
asset for another, whether or not such purchases and sales are reflected on a blockchain or
effected through a crypto asset trading platform, there are other transactions involving crypto
assets that do not involve transfers of the crypto asset from one market participant to another.

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Instead, in these types of transactions, one party agrees to pay another party a return based on the
performance of another asset. One of these types of transactions is what has become known in
the crypto asset trading area as a “perpetual futures contract.” While the crypto asset industry
refers to these arrangements as a future, in fact these are not futures contracts offered and sold on
regulated futures exchanges or in compliance with laws applicable to futures transactions.
27. When an investor buys or sells a perpetual futures contract for a particular crypto
asset, the investor is not buying or selling that crypto asset. Instead, the investor is buying or
selling exposure to future movements of that crypto asset’s price relative to another asset,
including another crypto asset. For example, an investor who buys a perpetual futures contract
based on the relative value of certain crypto assets has a synthetic “long” position on the crypto
assets, and the value of the investor’s position in the contract will rise if the relative value of the
crypto assets rises. Conversely, the investor who sold that perpetual futures contract has a
synthetic “short” position on the crypto assets, and the value of that position will rise if the
relative value of the crypto assets falls. Either party to a perpetual futures contract can settle the
contract at any time and realize their gain or loss.
FACT ALLEGATIONS
28. Mango Markets is a crypto asset trading platform built on the Solana blockchain.
Mango Markets launched in or about March 2021.
29. Mango Markets operated through websites that were accessible to the general
public, including to persons in this district.
30. As discussed in greater detail below, Mango Markets offered and sold the MNGO
token, a so-called “governance token,” as an investment contract and, therefore, the MNGO
token is a security.

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31. From approximately March 2021 until trading was halted on or about October 12,
2022, investors could buy and sell the MNGO token and other crypto assets on Mango Markets.
Mango Offers and Sells MNGO Tokens in Unregistered Transactions.
32. Between August 9 and 10, 2021, Mango offered and sold 500 million MNGO
tokens (5% of the maximum supply), in exchange for consideration in the form of the crypto
assets known as USD Coin (“USDC”), to the general public on its website
(https://www.token.mango.markets).
33. To publicly promote the offer and sale of MNGO, Mango published, among other
things, a “Litepaper” that generally described the terms of the offering and certain rights that
MNGO token holders would be entitled to.
34. Under the terms of the Mango offer, participants had 24 hours to deposit as much
USDC as they wanted to a smart contract on Mango Markets, referred to as a “vault” on the
website.
35. For the next 24 hours, deposits were frozen, but users could decide to withdraw
any USDC deposited based on seeing the estimated price for the MNGO token.
36. Buyers got a pro-rata price for the MNGO token at the end of the two-day token
sale and every participant got the same price for MNGO tokens: 0.141 USDC.
37. U.S. investors were purportedly ineligible to participate in this MNGO token sale.
However, at least several investors who received MNGO tokens from the initial distribution,
including several of Mango Markets’ creators, resided in the United States at the time.
38. As a result of this offering, MNGO tokens were held by thousands of investors,
dispersed across the globe, with a limited ability to communicate with one other.

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39. MNGO was tradeable on both Mango Markets and secondary trading platforms,
including in the United States, immediately following the sale.
40. Beginning on August 11, 2021, the day after the sale concluded, Mango tweeted
out the names of the crypto asset trading platforms that offered trading of the MNGO token, and
the Mango Markets website contained links to websites where investors could purchase and sell
MNGO tokens.
41. Both prior to and immediately following the offering, participants on Mango’s
Twitter and Discord feeds discussed whether investors were free to sell their MNGO tokens.
42. Mango also retweeted a YouTube video on August 9, 2021 (the first day of the
sale) and a post in which commenters speculated that purchasers of the token were attempting to
keep the price as low as possible so that it would rise when the token was made available for
trading on secondary platforms following the sale.
MNGO Token Holders Entered into a Common Enterprise.
43. The price of MNGO tokens moved up and down together. In other words, the
price of the MNGO token rose and fell equally for each MNGO token holder such that each
investor profited or suffered losses pro rata based on the ownership share of MNGO tokens.
44. Mango also touted that the proceeds of the MNGO token sales would be pooled
and used indiscriminately to pursue MNGO’s projects – not divided into subaccounts for sub
groups of MNGO token investors.
45. Mango stated publicly that the funds raised through the sale of 5% of the MNGO
token supply (over $70 million) went to the treasury of the Mango DAO, the Mango Markets
governing body, for use as a so-called “insurance fund.”

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46. According to Mango’s “Litepaper,” the “insurance fund will pay MNGO
Perp[etual future]s smart contracts in the event extreme volatility causes bankrupt accounts and
excess losses in the system.”
47. Mango stated publicly that another 5% of the MNGO token supply went to the
“creators” of Mango Markets and the remaining 90% was for the Mango DAO treasury and
could only be unlocked/distributed via governance proposals.
48. Approximately ten individuals collectively received the 5% of the MNGO token
supply that was allocated at the time of the token sale for the “creators.”
MNGO Token Holders Expect Profits Derived from the Mango Creators’ Efforts.
49. Investors could also use MNGO tokens to participate in liquidity provider pools
on the Mango Markets platform, and token holders could earn more MNGO tokens as a reward
for providing liquidity.
50. In addition, MNGO token holders could continuously earn interest on their
tokens.
51. According to the Litepaper, to “earn interest, simply deposit into your Mango
Markets Account; all assets automatically earn interest. Annual rates are displayed in the
Account page in green.”
52. The Litepaper contained a “Project Status & Roadmap” section, which detailed
the efforts that Mango Markets had taken – and would take – to develop the platform.
53. The Mango Markets creators also provided significant managerial efforts to
develop the platform, both prior to and following the MNGO token sale.
54. For example, the Mango Markets creators developed and deployed code for the
different versions of the platform, created content for the Mango Markets’ website, fed the

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content of Mango Markets’ Twitter account, submitted and voted on governance proposals, and
responded to queries from MNGO token holders and others about the platform and the MNGO
token on the Mango Markets’ Twitter and Discord feeds.
MNGO Token’s “Governance” Rights Are Illusory.
55. The “governance” afforded to MNGO token holders was limited and minimal –
and was non-existent for those MNGO token holders that did not deposit the requisite amount.
56. According to Mango’s Litepaper, the MNGO token “is a governance token, first
and foremost,” whose ownership purportedly grants voting rights on proposals to dictate the
Mango Markets protocol’s future.
57. While the Litepaper explained that “[a]nybody with 0.1% of Mango Token” could
propose a governance action, the Mango DAO’s website set forth different amounts of MNGO
tokens that were required to be deposited depending on the nature of the governance proposal.
58. Thus, under the terms set by Mango, not all MNGO token holders were eligible to
submit every type of governance proposal.
59. Moreover, because governance “[p]roposals are executable code, not suggestions
for a team or foundation to implement,” according to Mango’s Litepaper, not all MNGO token
holders may have had the requisite technical skills to submit governance proposals.
60. As governance proposals were also “subject to a 3 day voting period” and if a
“majority and at least 2% of the Mango Token supply are cast for the proposal, it . . . can be
implemented after 2 days,” according to the Litepaper, only a small percentage MNGO token
holders needed to vote for any proposal.
61. In practice, only a small number of MNGO token holders actually exercised their
potential voting rights.

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62. Immediately following the sale, the ownership distribution of MNGO tokens was
at least 50% in the hands of Mango’s creators because an equal amount of MNGO tokens were
received by the creators of Mango Markets as were offered and sold to the general public.
63. Therefore, despite thousands of wallet addresses holding MNGO tokens, on
average, approximately five-to-ten addresses voted on any given proposal, and a few repeat
wallet addresses, including wallet addresses controlled by several of the creators of Mango
Markets, dominated the votes.
64. In addition, shortly after the token sale, a governance proposal was made to
establish a seven-member “mango v3 program upgrade council,” which included the creators of
Mango Markets (the “Upgrade Council”). The proposed Upgrade Council would have the
authority to unilaterally (i.e., without a governance proposal) control upgrades of the Mango
Markets platform through a majority vote.
65. The Upgrade Council proposal passed with 2.29% of the Mango token supply
voting in favor. Of the supporting votes, at least 70% (1.64% of the 2.29%) were cast by two of
the creators of Mango Markets.
66. Based on the foregoing, MNGO token holders invested in a common enterprise
with an expectation of profits derived from the efforts of others.
Eisenberg Attacks Mango Markets and Manipulates the MNGO Token.
67. To use Mango Markets, an investor had to connect a crypto asset wallet to the
Mango Markets trading platform, create a Mango Markets account, and deposit crypto assets into
that account.
68. After an investor had created and funded a Mango Markets account, the investor
could trade different types of crypto assets, including the MNGO token, on Mango Markets.

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69. Investors could also buy and sell MNGO perpetual futures on Mango Markets
based on the relationship between the value of MNGO and the value of USDC.
70. Mango Markets also allowed investors to borrow crypto assets, in amounts based
on the value of the borrower’s Mango Markets portfolio, and to withdraw those borrowed crypto
assets from Mango Markets.
71. Prior to October 11, 2022, Eisenberg created two anonymous accounts on Mango
Markets (“Mango Account-A” and “Mango Account-B”) that he controlled.
72. On October 11, 2022, while located in the United States, Eisenberg funded
Mango Account-A and Mango Account-B each with approximately 5 million USDC.
73. Eisenberg then directed Mango Account-B to sell to Mango Account-A MNGO
perpetual futures based on the relative value of MNGO and USDC.
74. The MNGO perpetual futures position was based on a total of 488,302,109
MNGO (out of approximately 500 million tokens in circulation), at a price of 0.0382
USDC/MNGO.
75. Accordingly, Mango Account-A held a synthetic “long” position, the value of
which would rise if the value of MNGO relative to USDC rose above 0.0382 USDC/MNGO, and
Mango Account-B held a synthetic “short” position, the value of which would rise if the value of
MNGO relative to USDC fell below 0.0382 USDC/MNGO.
76. Later that same day, beginning at approximately 6:26 p.m. EDT, and continuing
over an approximately 20-minute period, Eisenberg submitted MNGO token orders (some of
which he cancelled) at incrementally higher prices on various crypto asset trading platforms.
Eisenberg used USDC and another crypto asset called USDT to purchase large amounts of
MNGO tokens through multiple transactions totaling over 4.5 million MNGO.

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77. For example, on one crypto asset trading platform, Eisenberg purchased 3.5
million MNGO tokens through approximately 10 transactions.
78. On another crypto asset trading platform, Eisenberg purchased over 1 million
MNGO tokens through the following six transactions:

79. The trading volume on the day of Eisenberg’s manipulation was over 2,000%
higher than the average volume for MNGO the preceding ten days, and 2,018% higher than the
average volume for the preceding 90 trading days. Eisenberg’s trading accounted for as much as
90% of the trading volume on some exchanges on October 11, 2022.
80. As a result of Eisenberg’s transactions, the price of the MNGO token artificially
increased from approximately 0.0382 USDC/MNGO to as high as approximately 0.91
USDC/MNGO on some crypto asset trading platforms.
81. This price manipulation was possible in part because MNGO is a thinly traded
token with low liquidity.
82. The price of the MNGO perpetual futures position held by Mango Account-A
depended on, among other things, the relative value of MNGO tokens and USDC.
Sending Time
(UTC)
SymbolSide
Last Execution Time
(UTC)
Order Price    Avg. PriceOrder QtyFilled QtyOrder Status
2022-10-11 05:06:38   MNGO/USDT  Buy2022-10-11 05:07:190.040        124,751                     -    Canceled
2022-10-11 22:26:59   MNGO/USDT  Buy2022-10-11 22:26:590.135710.04007          32,441             32,441   Filled
2022-10-11 22:27:04   MNGO/USDT  Buy2022-10-11 22:27:040.135710.04096          30,201             30,201   Filled
2022-10-11 22:27:34   MNGO/USDT  Buy2022-10-11 22:27:360.135710.11752        197,560           197,560   Filled
2022-10-11 22:27:48   MNGO/USDT  Buy2022-10-11 22:47:140.050.04962        840,255           769,837   Partial Fill
2022-10-11 22:28:06   MNGO/USDT  Buy2022-10-11 22:28:060.455290.45529                 25                    25   Filled
2022-10-11 22:35:36   MNGO/USDT  Buy2022-10-11 22:45:230.455290.45529          23,223             23,223   Filled
2022-10-11 22:35:53   MNGO/USDT  Sell2022-10-12 02:53:460.490        257,516                     -    Canceled
2022-10-11 22:47:14   MNGO/USDT  Sell2022-10-12 02:53:460.050.05783        795,771                  847   Partial Fill

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83. To determine the relative value of MNGO and USDC, Mango used an “oracle,”
which employed a computer program that calculated the relative value of crypto asset pairings by
looking at the exchange rate of those crypto assets on three other crypto asset trading platforms
(the “Oracle Price Source Platforms”).
84. The oracle information was automatically input to Mango Markets such that when
the oracle price changed for a particular crypto asset pairing, the price of perpetual futures in that
crypto asset pairing also changed on Mango Markets.
85. Changes in the relative price of crypto asset pairs, such as MNGO and USDC, on
the Oracle Price Source Platforms therefore impacted the price of perpetual futures on Mango
Markets.
86. Eisenberg focused his purchases of the MNGO tokens described in paragraph 76
on the Oracle Price Source Platforms.
87. As a result of Eisenberg’s manipulative trading of the MNGO token on Oracle
Price Source Platforms and another crypto asset trading platform during this period, the price of
MNGO perpetual futures on Mango Markets rose from approximately 0.0382 USDC/MNGO to
a high of approximately 0.54 USDC/MNGO, causing the price of the long MNGO perpetual
futures position held by Mango Account-A to increase, an increase of over 1,300%.
88. Using the artificially inflated value of the long MNGO perpetual futures position
in Mango Account-A as collateral, Eisenberg borrowed, then withdrew, approximately $116
million worth of various crypto assets from Mango Markets through 19 separate transactions.
89. While Eisenberg purported to be borrowing crypto assets, he had no intention of
repaying them.

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90. Eisenberg’s withdrawal of approximately $116 million worth of various crypto
assets left Mango Markets at a deficit because the total value of users’ assets on Mango Markets
at the time of Eisenberg’s attack was approximately $104 million.
91. Accordingly, when Eisenberg withdrew approximately $116 million worth of
various crypto assets, he put Mango Markets at a deficit in a number of crypto assets.
92. Mango Markets used, in part, the deposit and assets belonging to other Mango
Markets investors to loan the crypto assets to Eisenberg.
93. After Eisenberg stopped purchasing large amounts of the MNGO token to
artificially inflate its price, the price of MNGO tokens then fell to 0.031 USDC/MNGO, with
prices dropping as low as 0.0198, causing the price of MNGO perpetual futures on Mango
Markets to decrease to approximately 0.02 USDC/MNGO.
94. Eisenberg only began selling the MNGO tokens he acquired on October 11, 2022
after the price had declined to near pre-manipulation levels.
95. From the peak of Eisenberg’s manipulation of the MNGO token to the date of this
filing, the price dropped by approximately 90% in regular market trading, the volume fell by
approximately 80%, and, as described below, the MNGO token became even more illiquid.
Mango Shuts Down Mango Markets.
96. On October 12, 2022, a majority of the Upgrade Council voted to halt version 3 of
the Mango Markets platform, and one of the creators of Mango Markets developed, integrated,
and deployed code to shut down the entire market. Mango Markets remains inoperative as of the
date of this filing.
97. MNGO token holders did not propose – or vote on – a governance proposal to
halt the Mango Markets platform.

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98. Between October 11 and 13, 2022, certain members of the Upgrade Council  –
again, without a proposed or approved governance proposal – negotiated on behalf of the
platform with an individual purporting to be the perpetrator over, among other things, the return
of a portion of the crypto assets obtained through the attack.
99. After further negotiations, on October 13, 2022, certain members of the Upgrade
Council submitted a governance proposal on the Mango DAO message board. Specifically, the
governance proposal included, among other things, the following terms: (a) if the controller of a
specified wallet returned certain crypto assets to wallets controlled by the Upgrade Council and
Mango Markets developers within 12 hours of the proposal opening “as a show of good faith,”
and sent additional crypto assets “within 12 hours once the vote is complete and passes,”
(b) Mango Markets would use those funds (and funds in the Mango DAO treasury) “to cover the
remaining bad debts in the protocol” and make all Mango depositors whole, and (c) MNGO
token holders would waive any potential claims and would not pursue criminal investigations or
freezing of funds.
100. The governance proposal passed with 9.46% of MNGO token holders voting in
favor and 0.33% of MNGO token holders voting against.
101. Wallet addresses controlled by two members of the Upgrade Council – and who
were also involved in the negotiations with the perpetrator of the Mango Markets attack –
comprised more than half of the support for the proposal (5.17% of the 9.46% of MNGO token
holders voting in favor, or 53% of all token votes cast).
102. While the vote was underway, a wallet controlled by Eisenberg sent
approximately 10 million USDC to a wallet controlled by members of the Mango DAO.
103. After the proposal passed, multiple crypto asset wallets controlled by Eisenberg

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sent approximately $57 million worth of crypto assets to the Mango DAO.
104. The remaining approximately $49 million of the total $116 million worth of
different crypto assets that Eisenberg borrowed, and then withdrew from Mango Markets, was
never received by the Mango DAO or Mango Markets.
Eisenberg Admits He Manipulated the MNGO Token.
105. On October 15, 2022, Eisenberg revealed his identity on Twitter, issuing a
“statement on recent events”:
I was involved with a team that operated a highly profitable trading
strategy last week. I believe all of our actions were legal open market
actions,  using  the  protocol  as  designed,  even  if  the  development
team  did  not  fully  anticipate  all  the  consequences  of  setting
parameters the way they are. Unfortunately, the exchange this took
place  on,  Mango  Markets,  became  insolvent  as  a  result,  with  the
insurance fund being insufficient to cover all liquidations. This led
to  other  users  being  unable  to  access  their  funds.  To  remedy  the
situation,  I  helped  negotiate  a  settlement  agreement  with  the
insurance fund with the goal of making all users whole as soon as
possible as well as recapitalizing the exchange . . . It is not illegal to
be  smarter  than  your  counterparties  in  a  swap  transaction  nor  is  it
improper  to  understand  a  financial  product  better  than  the  people
who invented that product.

106. By engaging in the market manipulation described above, Eisenberg knew, or was
reckless in not knowing, he was engaged in manipulative, deceptive, and fraudulent conduct,
because his purchase of MNGO tokens and market manipulation were intended to create the
false appearance of robust trade volume in MNGO tokens and artificially prop up the token’s
price, in order to induce market participants to trade in MNGO tokens and drive up the price of
MNGO tokens, thereby increasing the price of MNGO perpetual futures on Mango Markets and
causing the price of Eisenberg’s long MNGO perpetual futures position to increase.
Mango Plans to Launch Mango Markets Version 4.
107. Version 3 of Mango Markets remains halted.

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108. However, Mango has been touting the upcoming launch of version 4 of Mango
Markets on its website and on social media, stating, for example, that the “next generation of
Mango is on the horizon. With exciting new features and risk mitigation strategies, Mango v4 is
your one-stop DeFi shop.”
109. The creators of Mango Markets have been involved in developing the code for
version 4.
110. Mango has not announced the launch date.
FIRST CLAIM FOR RELIEF
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c)

111. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
110, as though fully set forth therein.
112. By reason of the conduct described above, Defendant, directly or indirectly,
acting intentionally, knowingly or recklessly, in connection with the purchase or sale of
securities, by the use of the means and instruments of interstate commerce or of the mails,
employed devices, schemes, or artifices to defraud, and engaged in acts, practices, or courses of
business which operated or would operate as a fraud or deceit upon other persons.
113. In engaging in the conduct described herein, Defendant acted knowingly and with
a reckless disregard for the truth.
114. Eisenberg knew, or was reckless in not knowing, he was engaged in manipulative,
deceptive, and fraudulent conduct, because, among other things, Eisenberg’s purchases of
MNGO tokens and market manipulation was intended to create the false appearance of robust
trade volume in MNGO tokens and artificially prop up the token’s price, in order to induce
market participants to trade in MNGO tokens and drive up the price of MNGO tokens, thereby

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increasing the price of MNGO perpetual futures on Mango Markets and causing the price of
Eisenberg’s long MNGO perpetual futures position to increase.
115. By virtue of the foregoing, Defendant violated, and unless enjoined will continue
to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rules 10b-5(a) and 10b-
5(c) [17 C.F.R. § 240.10b-5(a), (c)] promulgated thereunder.
SECOND CLAIM FOR RELIEF
Violation of Exchange Act Section 9(a)(2)

116. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through
110, as though fully set forth therein.
117. By reason of the conduct described above, Defendant directly or indirectly, by use
of the mails or any means or instrumentality of interstate commerce, or of any facility of any
national securities exchange or any member of a national securities exchange, effected, alone or
with one or more other persons, a series of transactions in securities, creating actual or apparent
active trading in such securities and/or raising or depressing the price of such securities, for the
purpose of inducing the purchase or sale of such securities by others, to engage in market
manipulation that affected the volume and prices of such securities for the purpose of inducing
the purchase or sale of such securities by others.
118. Eisenberg acted with the intent to induce trading by others.
119. By virtue of the foregoing, Defendant violated, and unless enjoined will continue
to violate, Section 9(a)(2) of the Exchange Act [15 U.S.C. § 78i(a)(2)].
PRAYER FOR RELIEF
         WHEREFORE, the SEC respectfully requests that the Court enter Final Judgment:

20
I.
Finding that Defendant violated the statutes and rules set forth in this Complaint as to
each;
II.
Permanently restraining and enjoining Defendant, and all persons in active concert or
participation with him, from violating, directly or indirectly, the statutes and rules set forth in this
Complaint as to each;
III.
Order Defendant to disgorge all ill-gotten gains derived from his illegal conduct as set
forth in this Complaint, including prejudgment interest thereon pursuant to Section 21(d)(3),
21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5), and (d)(7)];
IV.
Order Defendant to pay civil penalties pursuant to Section 21(d)(3) of the Exchange Act
[15 U.S.C. § 78u(d)(3)];
V.

Prohibiting Defendant from (i) participating, directly or indirectly, in the purchase, offer,
or sale of any security, or (ii) engaging in activities for purposes of inducing or attempting to
induce the purchase or sale of any security; provided, however, that such injunction shall not
prevent Eisenberg from participating in any employer sponsored retirement plan offered pursuant
to his employment, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)];
VI.
Grant such other and further relief as the Court determines to be necessary and
appropriate.

21
VII.
Retaining jurisdiction over this action to implement and carry out the terms of all orders
and decrees that may be entered.
JURY TRIAL DEMAND

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff SEC demands that
this case be tried to a jury.
Date:    January 20, 2023   Respectfully submitted,

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION

      /s/ Alyssa A. Qualls
           Alyssa A. Qualls (AQ-4247)
Kristin Pauley (KP-7633)
     Attorneys for Plaintiff
          United States Securities and Exchange Commission
           Chicago Regional Office
          175 West Jackson Blvd., Suite 1450
          Chicago, Illinois 60604
          (312) 353-7390
          (312) 353-7398 (facsimile)
      [email protected]
                                                                        [email protected]

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

 
 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, 
 

Plaintiff, 
v. 

 
AVRAHAM EISENBERG, 
 

Defendant. 
 

 
 
 
Civil Action No. 1:23-cv-503 
 
 
Jury Trial Demanded 

 
COMPLAINT 

 
Plaintiff United States Securities and Exchange Commission (the “SEC”) for its 

Complaint against Avraham Eisenberg (“Eisenberg”) alleges as follows: 

SUMMARY 

1. Eisenberg drained approximately $116 million from a crypto asset trading 

platform known as Mango Markets after manipulating the trading price and volume of the 

“MNGO token,” a so-called “governance token” of Mango Markets that was purchased and sold 

as a crypto asset security.  

2. Beginning on or around October 11, 2022, Eisenberg, using accounts on Mango 

Markets he controlled, sold and contemporaneously purchased purported perpetual futures 

contracts with respect to approximately 488 million MNGO tokens (out of approximately 500 

million tokens in circulation).  

3. Eisenberg then submitted and executed a series of large purchases of the thinly 

traded MNGO tokens at incrementally higher prices, to artificially raise its price. 

4. The trading volume on the day of Eisenberg’s manipulation was over 2,000% 

higher than the average volume for the preceding ten trading days (and 2,018% higher than the 

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2 

average volume for the preceding 90 trading days), and Eisenberg’s transactions artificially 

increased MNGO’s price on Mango Markets by more than 2,200%. These transactions also 

increased the price of MNGO perpetual futures contracts by approximately 1,300%, significantly 

increasing the value of Eisenberg’s long MNGO perpetual futures position.  

5. The increased value of Eisenberg’s long MNGO perpetual futures position 

allowed him to use that position as collateral to borrow and ultimately withdraw from the Mango 

Markets platform approximately $116 million worth of various crypto assets – some of which 

belonged to investors trading on the Mango Markets platform, thereby draining all available 

assets from the platform.  

6. After withdrawing the $116 million in crypto assets, Eisenberg stopped 

manipulating the price of the MNGO token, which led to significant declines in the prices of 

MNGO and MNGO perpetual futures contracts. 

7. From the peak of Eisenberg’s manipulation of the MNGO token to the date of this 

filing, the price dropped by approximately 90% in regular market trading, the volume plummeted 

by approximately 80%, and the MNGO token became more illiquid, thereby harming investors.  

8. Eisenberg perpetrated the attack on Mango Markets while in Puerto Rico, but 

soon thereafter fled the country.  

9. On December 26, 2022, Eisenberg returned to Puerto Rico and was arrested on 

charges of commodities fraud and commodities manipulation in connection with the facts alleged 

herein. 

10. As set forth more fully below, the MNGO tokens Eisenberg purchased and 

manipulated were purchased and sold as investment contracts and therefore as “securities” under 

the federal securities laws. 

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3 

11. By engaging in the misconduct described here, Eisenberg violated numerous 

provisions of the federal securities laws, including certain antifraud and anti-market 

manipulation provisions, as detailed below. 

NATURE OF THE PROCEEDING AND RELIEF SOUGHT 

12. The SEC brings this action pursuant to the authority conferred upon it by 

Section 21(d) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78u(d)]. 

13. The SEC seeks a final judgment against Eisenberg: (a) permanently enjoining him 

from engaging in acts, practices, and courses of business alleged herein; (b) ordering him to 

disgorge his ill-gotten gains and pay prejudgment interest thereon pursuant to Section 21(d)(3), 

21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5), and (d)(7)]; 

(c) imposing civil money penalties on him pursuant to Section 21(d)(3) of the Exchange Act 

[15 U.S.C. § 78u(d)(3)]; and (d) permanently enjoining Eisenberg from (i) participating, directly 

or indirectly, in the purchase, offer, or sale of any security, or (ii) engaging in activities for 

purposes of inducing or attempting to induce the purchase or sale of any security; provided, 

however, that such injunction shall not prevent Eisenberg from participating in any employer 

sponsored retirement plan offered pursuant to his employer, pursuant to Section 21(d)(5) of the 

Exchange Act [15 U.S.C. § 78u(d)(5)]. 

JURISDICTION AND VENUE 

14. The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 

Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

Defendant, directly and indirectly, has made use of the means or instruments of transportation or 

communication in, and the means and instruments of interstate commerce or of the mails, in 

connection with the transactions, acts, practices, and courses of business alleged herein.   

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4 

15. Venue is proper in this district pursuant to Section 27 of the Exchange Act 

[15 U.S.C. § 78aa]. Defendant conducted certain transactions, acts, practices, and courses of 

business constituting the violations alleged herein within this district, including transacting 

MNGO tokens using a crypto asset trading platform with offices in this district.  

DEFENDANT 

16.  Eisenberg, age 27, is a U.S. citizen and is currently incarcerated at Metropolitan 

Detention Center Guaynabo, Puerto Rico, awaiting transport to the Southern District of New 

York. He is facing criminal charges of commodities fraud, commodities manipulation, and wire 

fraud in United States v. Eisenberg, 1:23-cr-10 (S.D.N.Y.), and civil charges of violations of the 

Commodity Exchange Act and regulations thereunder in CFTC v. Eisenberg, 1:23-cv-173 

(S.D.N.Y.). 

OTHER RELEVANT ENTITIES 

17. Mango Markets (“Mango Markets”) is a crypto asset trading platform built on a 

cryptographically secured ledger known as the “Solana blockchain.” 

18. Mango Labs, LLC (“Mango Labs”) is a Wyoming corporation with its principal 

place of business in San Francisco, California. Mango Labs was involved in the development of 

Mango Markets.  

19. Blockworks Foundation (“Blockworks Foundation” and, together with Mango 

Labs, “Mango”) is a Panamanian entity with an unknown place of business. Blockworks 

Foundation was involved in the development of Mango Markets.  

20. Mango DAO (“Mango DAO”) is an unincorporated business entity with an 

unknown place of business. Mango DAO is the governing body of Mango Markets.  

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BACKGROUND ON CRYPTO ASSETS 

21. The term “crypto asset” refers to an asset issued and/or transferred using 

distributed ledger or blockchain technology, including assets sometimes referred to as “digital 

assets,” “cryptocurrencies,” digital “coins,” and digital “tokens.” 

22. A blockchain or distributed ledger is a database spread across a network of 

computers that records all transactions in theoretically unchangeable, digitally recorded data 

packages. The system relies on cryptographic techniques for secure recording of transactions.  

23. Crypto assets are typically represented in one or more blockchains, meaning that 

records of their ownership and transfer are stored on that particular digital ledger or blockchain. 

24. Some digital assets may be “native tokens” to a particular blockchain – meaning 

that they are represented on their own blockchain, though other digital assets may also be 

represented on that same blockchain. Native tokens typically serve a number of technical 

functions on a distributed ledger, such as helping secure the ledger from manipulation or other 

forms of attacks. Like other “digital tokens,” native tokens may also be sold and traded for 

consideration, including on secondary markets. 

25. Examples of crypto asset blockchains include the “Bitcoin blockchain,” to which 

the crypto asset known as Bitcoin is the native asset; the “Ethereum blockchain,” to which the 

crypto asset known as ETH is the native asset; and the “Solana blockchain,” to which the crypto 

asset known as SOL is the native asset. 

26. In addition to trading activities that involve purchases and sales of one crypto 

asset for another, whether or not such purchases and sales are reflected on a blockchain or 

effected through a crypto asset trading platform, there are other transactions involving crypto 

assets that do not involve transfers of the crypto asset from one market participant to another.  

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Instead, in these types of transactions, one party agrees to pay another party a return based on the 

performance of another asset. One of these types of transactions is what has become known in 

the crypto asset trading area as a “perpetual futures contract.” While the crypto asset industry 

refers to these arrangements as a future, in fact these are not futures contracts offered and sold on 

regulated futures exchanges or in compliance with laws applicable to futures transactions. 

27. When an investor buys or sells a perpetual futures contract for a particular crypto 

asset, the investor is not buying or selling that crypto asset. Instead, the investor is buying or 

selling exposure to future movements of that crypto asset’s price relative to another asset, 

including another crypto asset. For example, an investor who buys a perpetual futures contract 

based on the relative value of certain crypto assets has a synthetic “long” position on the crypto 

assets, and the value of the investor’s position in the contract will rise if the relative value of the 

crypto assets rises. Conversely, the investor who sold that perpetual futures contract has a 

synthetic “short” position on the crypto assets, and the value of that position will rise if the 

relative value of the crypto assets falls. Either party to a perpetual futures contract can settle the 

contract at any time and realize their gain or loss. 

FACT ALLEGATIONS 

28. Mango Markets is a crypto asset trading platform built on the Solana blockchain. 

Mango Markets launched in or about March 2021.  

29. Mango Markets operated through websites that were accessible to the general 

public, including to persons in this district. 

30. As discussed in greater detail below, Mango Markets offered and sold the MNGO 

token, a so-called “governance token,” as an investment contract and, therefore, the MNGO 

token is a security. 

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31. From approximately March 2021 until trading was halted on or about October 12, 

2022, investors could buy and sell the MNGO token and other crypto assets on Mango Markets. 

Mango Offers and Sells MNGO Tokens in Unregistered Transactions. 

32. Between August 9 and 10, 2021, Mango offered and sold 500 million MNGO 

tokens (5% of the maximum supply), in exchange for consideration in the form of the crypto 

assets known as USD Coin (“USDC”), to the general public on its website 

(https://www.token.mango.markets). 

33. To publicly promote the offer and sale of MNGO, Mango published, among other 

things, a “Litepaper” that generally described the terms of the offering and certain rights that 

MNGO token holders would be entitled to. 

34. Under the terms of the Mango offer, participants had 24 hours to deposit as much 

USDC as they wanted to a smart contract on Mango Markets, referred to as a “vault” on the 

website.  

35. For the next 24 hours, deposits were frozen, but users could decide to withdraw 

any USDC deposited based on seeing the estimated price for the MNGO token.  

36. Buyers got a pro-rata price for the MNGO token at the end of the two-day token 

sale and every participant got the same price for MNGO tokens: 0.141 USDC. 

37. U.S. investors were purportedly ineligible to participate in this MNGO token sale. 

However, at least several investors who received MNGO tokens from the initial distribution, 

including several of Mango Markets’ creators, resided in the United States at the time. 

38. As a result of this offering, MNGO tokens were held by thousands of investors, 

dispersed across the globe, with a limited ability to communicate with one other. 

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39. MNGO was tradeable on both Mango Markets and secondary trading platforms, 

including in the United States, immediately following the sale.  

40. Beginning on August 11, 2021, the day after the sale concluded, Mango tweeted 

out the names of the crypto asset trading platforms that offered trading of the MNGO token, and 

the Mango Markets website contained links to websites where investors could purchase and sell 

MNGO tokens.  

41. Both prior to and immediately following the offering, participants on Mango’s 

Twitter and Discord feeds discussed whether investors were free to sell their MNGO tokens.  

42. Mango also retweeted a YouTube video on August 9, 2021 (the first day of the 

sale) and a post in which commenters speculated that purchasers of the token were attempting to 

keep the price as low as possible so that it would rise when the token was made available for 

trading on secondary platforms following the sale. 

MNGO Token Holders Entered into a Common Enterprise. 

43. The price of MNGO tokens moved up and down together. In other words, the 

price of the MNGO token rose and fell equally for each MNGO token holder such that each 

investor profited or suffered losses pro rata based on the ownership share of MNGO tokens.  

44. Mango also touted that the proceeds of the MNGO token sales would be pooled 

and used indiscriminately to pursue MNGO’s projects – not divided into subaccounts for sub 

groups of MNGO token investors. 

45. Mango stated publicly that the funds raised through the sale of 5% of the MNGO 

token supply (over $70 million) went to the treasury of the Mango DAO, the Mango Markets 

governing body, for use as a so-called “insurance fund.”   

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46. According to Mango’s “Litepaper,” the “insurance fund will pay MNGO 

Perp[etual future]s smart contracts in the event extreme volatility causes bankrupt accounts and 

excess losses in the system.”  

47. Mango stated publicly that another 5% of the MNGO token supply went to the 

“creators” of Mango Markets and the remaining 90% was for the Mango DAO treasury and 

could only be unlocked/distributed via governance proposals.  

48. Approximately ten individuals collectively received the 5% of the MNGO token 

supply that was allocated at the time of the token sale for the “creators.” 

MNGO Token Holders Expect Profits Derived from the Mango Creators’ Efforts. 

49. Investors could also use MNGO tokens to participate in liquidity provider pools 

on the Mango Markets platform, and token holders could earn more MNGO tokens as a reward 

for providing liquidity.  

50. In addition, MNGO token holders could continuously earn interest on their 

tokens.  

51. According to the Litepaper, to “earn interest, simply deposit into your Mango 

Markets Account; all assets automatically earn interest. Annual rates are displayed in the 

Account page in green.” 

52. The Litepaper contained a “Project Status & Roadmap” section, which detailed 

the efforts that Mango Markets had taken – and would take – to develop the platform.  

53. The Mango Markets creators also provided significant managerial efforts to 

develop the platform, both prior to and following the MNGO token sale. 

54. For example, the Mango Markets creators developed and deployed code for the 

different versions of the platform, created content for the Mango Markets’ website, fed the 

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content of Mango Markets’ Twitter account, submitted and voted on governance proposals, and 

responded to queries from MNGO token holders and others about the platform and the MNGO 

token on the Mango Markets’ Twitter and Discord feeds. 

MNGO Token’s “Governance” Rights Are Illusory. 

55. The “governance” afforded to MNGO token holders was limited and minimal – 

and was non-existent for those MNGO token holders that did not deposit the requisite amount. 

56. According to Mango’s Litepaper, the MNGO token “is a governance token, first 

and foremost,” whose ownership purportedly grants voting rights on proposals to dictate the 

Mango Markets protocol’s future. 

57. While the Litepaper explained that “[a]nybody with 0.1% of Mango Token” could 

propose a governance action, the Mango DAO’s website set forth different amounts of MNGO 

tokens that were required to be deposited depending on the nature of the governance proposal.  

58. Thus, under the terms set by Mango, not all MNGO token holders were eligible to 

submit every type of governance proposal. 

59. Moreover, because governance “[p]roposals are executable code, not suggestions 

for a team or foundation to implement,” according to Mango’s Litepaper, not all MNGO token 

holders may have had the requisite technical skills to submit governance proposals. 

60. As governance proposals were also “subject to a 3 day voting period” and if a 

“majority and at least 2% of the Mango Token supply are cast for the proposal, it . . . can be 

implemented after 2 days,” according to the Litepaper, only a small percentage MNGO token 

holders needed to vote for any proposal.  

61. In practice, only a small number of MNGO token holders actually exercised their 

potential voting rights. 

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62. Immediately following the sale, the ownership distribution of MNGO tokens was 

at least 50% in the hands of Mango’s creators because an equal amount of MNGO tokens were 

received by the creators of Mango Markets as were offered and sold to the general public.  

63. Therefore, despite thousands of wallet addresses holding MNGO tokens, on 

average, approximately five-to-ten addresses voted on any given proposal, and a few repeat 

wallet addresses, including wallet addresses controlled by several of the creators of Mango 

Markets, dominated the votes.  

64. In addition, shortly after the token sale, a governance proposal was made to 

establish a seven-member “mango v3 program upgrade council,” which included the creators of 

Mango Markets (the “Upgrade Council”). The proposed Upgrade Council would have the 

authority to unilaterally (i.e., without a governance proposal) control upgrades of the Mango 

Markets platform through a majority vote. 

65. The Upgrade Council proposal passed with 2.29% of the Mango token supply 

voting in favor. Of the supporting votes, at least 70% (1.64% of the 2.29%) were cast by two of 

the creators of Mango Markets.  

66. Based on the foregoing, MNGO token holders invested in a common enterprise 

with an expectation of profits derived from the efforts of others. 

Eisenberg Attacks Mango Markets and Manipulates the MNGO Token. 

67. To use Mango Markets, an investor had to connect a crypto asset wallet to the 

Mango Markets trading platform, create a Mango Markets account, and deposit crypto assets into 

that account.  

68. After an investor had created and funded a Mango Markets account, the investor 

could trade different types of crypto assets, including the MNGO token, on Mango Markets.  

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12 

69. Investors could also buy and sell MNGO perpetual futures on Mango Markets 

based on the relationship between the value of MNGO and the value of USDC. 

70. Mango Markets also allowed investors to borrow crypto assets, in amounts based 

on the value of the borrower’s Mango Markets portfolio, and to withdraw those borrowed crypto 

assets from Mango Markets. 

71. Prior to October 11, 2022, Eisenberg created two anonymous accounts on Mango 

Markets (“Mango Account-A” and “Mango Account-B”) that he controlled. 

72. On October 11, 2022, while located in the United States, Eisenberg funded 

Mango Account-A and Mango Account-B each with approximately 5 million USDC.  

73. Eisenberg then directed Mango Account-B to sell to Mango Account-A MNGO 

perpetual futures based on the relative value of MNGO and USDC.  

74. The MNGO perpetual futures position was based on a total of 488,302,109 

MNGO (out of approximately 500 million tokens in circulation), at a price of 0.0382 

USDC/MNGO.  

75. Accordingly, Mango Account-A held a synthetic “long” position, the value of 

which would rise if the value of MNGO relative to USDC rose above 0.0382 USDC/MNGO, and 

Mango Account-B held a synthetic “short” position, the value of which would rise if the value of 

MNGO relative to USDC fell below 0.0382 USDC/MNGO.  

76. Later that same day, beginning at approximately 6:26 p.m. EDT, and continuing 

over an approximately 20-minute period, Eisenberg submitted MNGO token orders (some of 

which he cancelled) at incrementally higher prices on various crypto asset trading platforms. 

Eisenberg used USDC and another crypto asset called USDT to purchase large amounts of 

MNGO tokens through multiple transactions totaling over 4.5 million MNGO.  

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13 

77. For example, on one crypto asset trading platform, Eisenberg purchased 3.5 

million MNGO tokens through approximately 10 transactions.  

78. On another crypto asset trading platform, Eisenberg purchased over 1 million 

MNGO tokens through the following six transactions: 

 

 

79. The trading volume on the day of Eisenberg’s manipulation was over 2,000% 

higher than the average volume for MNGO the preceding ten days, and 2,018% higher than the 

average volume for the preceding 90 trading days. Eisenberg’s trading accounted for as much as 

90% of the trading volume on some exchanges on October 11, 2022.  

80. As a result of Eisenberg’s transactions, the price of the MNGO token artificially 

increased from approximately 0.0382 USDC/MNGO to as high as approximately 0.91 

USDC/MNGO on some crypto asset trading platforms. 

81. This price manipulation was possible in part because MNGO is a thinly traded 

token with low liquidity. 

82. The price of the MNGO perpetual futures position held by Mango Account-A 

depended on, among other things, the relative value of MNGO tokens and USDC.  

Sending Time 
(UTC)

Symbol Side
Last Execution Time 
(UTC)

Order Price Avg. Price Order Qty Filled Qty Order Status

2022-10-11 05:06:38 MNGO/USDT Buy 2022-10-11 05:07:19 0.04 0        124,751                   -   Canceled

2022-10-11 22:26:59 MNGO/USDT Buy 2022-10-11 22:26:59 0.13571 0.04007          32,441           32,441 Filled

2022-10-11 22:27:04 MNGO/USDT Buy 2022-10-11 22:27:04 0.13571 0.04096          30,201           30,201 Filled

2022-10-11 22:27:34 MNGO/USDT Buy 2022-10-11 22:27:36 0.13571 0.11752        197,560         197,560 Filled

2022-10-11 22:27:48 MNGO/USDT Buy 2022-10-11 22:47:14 0.05 0.04962        840,255         769,837 Partial Fill

2022-10-11 22:28:06 MNGO/USDT Buy 2022-10-11 22:28:06 0.45529 0.45529                 25                  25 Filled

2022-10-11 22:35:36 MNGO/USDT Buy 2022-10-11 22:45:23 0.45529 0.45529          23,223           23,223 Filled

2022-10-11 22:35:53 MNGO/USDT Sell 2022-10-12 02:53:46 0.49 0        257,516                   -   Canceled

2022-10-11 22:47:14 MNGO/USDT Sell 2022-10-12 02:53:46 0.05 0.05783        795,771                847 Partial Fill

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14 

83. To determine the relative value of MNGO and USDC, Mango used an “oracle,” 

which employed a computer program that calculated the relative value of crypto asset pairings by 

looking at the exchange rate of those crypto assets on three other crypto asset trading platforms 

(the “Oracle Price Source Platforms”).  

84. The oracle information was automatically input to Mango Markets such that when 

the oracle price changed for a particular crypto asset pairing, the price of perpetual futures in that 

crypto asset pairing also changed on Mango Markets.  

85. Changes in the relative price of crypto asset pairs, such as MNGO and USDC, on 

the Oracle Price Source Platforms therefore impacted the price of perpetual futures on Mango 

Markets. 

86. Eisenberg focused his purchases of the MNGO tokens described in paragraph 76 

on the Oracle Price Source Platforms. 

87. As a result of Eisenberg’s manipulative trading of the MNGO token on Oracle 

Price Source Platforms and another crypto asset trading platform during this period, the price of 

MNGO perpetual futures on Mango Markets rose from approximately 0.0382 USDC/MNGO to 

a high of approximately 0.54 USDC/MNGO, causing the price of the long MNGO perpetual 

futures position held by Mango Account-A to increase, an increase of over 1,300%.  

88. Using the artificially inflated value of the long MNGO perpetual futures position 

in Mango Account-A as collateral, Eisenberg borrowed, then withdrew, approximately $116 

million worth of various crypto assets from Mango Markets through 19 separate transactions.  

89. While Eisenberg purported to be borrowing crypto assets, he had no intention of 

repaying them. 

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90. Eisenberg’s withdrawal of approximately $116 million worth of various crypto 

assets left Mango Markets at a deficit because the total value of users’ assets on Mango Markets 

at the time of Eisenberg’s attack was approximately $104 million.  

91. Accordingly, when Eisenberg withdrew approximately $116 million worth of 

various crypto assets, he put Mango Markets at a deficit in a number of crypto assets.  

92. Mango Markets used, in part, the deposit and assets belonging to other Mango 

Markets investors to loan the crypto assets to Eisenberg. 

93. After Eisenberg stopped purchasing large amounts of the MNGO token to 

artificially inflate its price, the price of MNGO tokens then fell to 0.031 USDC/MNGO, with 

prices dropping as low as 0.0198, causing the price of MNGO perpetual futures on Mango 

Markets to decrease to approximately 0.02 USDC/MNGO. 

94. Eisenberg only began selling the MNGO tokens he acquired on October 11, 2022 

after the price had declined to near pre-manipulation levels.  

95. From the peak of Eisenberg’s manipulation of the MNGO token to the date of this 

filing, the price dropped by approximately 90% in regular market trading, the volume fell by 

approximately 80%, and, as described below, the MNGO token became even more illiquid. 

Mango Shuts Down Mango Markets. 

96. On October 12, 2022, a majority of the Upgrade Council voted to halt version 3 of 

the Mango Markets platform, and one of the creators of Mango Markets developed, integrated, 

and deployed code to shut down the entire market. Mango Markets remains inoperative as of the 

date of this filing. 

97. MNGO token holders did not propose – or vote on – a governance proposal to 

halt the Mango Markets platform. 

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98. Between October 11 and 13, 2022, certain members of the Upgrade Council  – 

again, without a proposed or approved governance proposal – negotiated on behalf of the 

platform with an individual purporting to be the perpetrator over, among other things, the return 

of a portion of the crypto assets obtained through the attack.  

99. After further negotiations, on October 13, 2022, certain members of the Upgrade 

Council submitted a governance proposal on the Mango DAO message board. Specifically, the 

governance proposal included, among other things, the following terms: (a) if the controller of a 

specified wallet returned certain crypto assets to wallets controlled by the Upgrade Council and 

Mango Markets developers within 12 hours of the proposal opening “as a show of good faith,” 

and sent additional crypto assets “within 12 hours once the vote is complete and passes,” 

(b) Mango Markets would use those funds (and funds in the Mango DAO treasury) “to cover the 

remaining bad debts in the protocol” and make all Mango depositors whole, and (c) MNGO 

token holders would waive any potential claims and would not pursue criminal investigations or 

freezing of funds. 

100. The governance proposal passed with 9.46% of MNGO token holders voting in 

favor and 0.33% of MNGO token holders voting against.  

101. Wallet addresses controlled by two members of the Upgrade Council – and who 

were also involved in the negotiations with the perpetrator of the Mango Markets attack – 

comprised more than half of the support for the proposal (5.17% of the 9.46% of MNGO token 

holders voting in favor, or 53% of all token votes cast).  

102. While the vote was underway, a wallet controlled by Eisenberg sent 

approximately 10 million USDC to a wallet controlled by members of the Mango DAO.  

103. After the proposal passed, multiple crypto asset wallets controlled by Eisenberg 

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sent approximately $57 million worth of crypto assets to the Mango DAO.  

104. The remaining approximately $49 million of the total $116 million worth of 

different crypto assets that Eisenberg borrowed, and then withdrew from Mango Markets, was 

never received by the Mango DAO or Mango Markets.  

Eisenberg Admits He Manipulated the MNGO Token. 

105. On October 15, 2022, Eisenberg revealed his identity on Twitter, issuing a 

“statement on recent events”:  

I was involved with a team that operated a highly profitable trading 
strategy last week. I believe all of our actions were legal open market 
actions, using the protocol as designed, even if the development 
team did not fully anticipate all the consequences of setting 
parameters the way they are. Unfortunately, the exchange this took 
place on, Mango Markets, became insolvent as a result, with the 
insurance fund being insufficient to cover all liquidations. This led 
to other users being unable to access their funds. To remedy the 
situation, I helped negotiate a settlement agreement with the 
insurance fund with the goal of making all users whole as soon as 
possible as well as recapitalizing the exchange . . . It is not illegal to 
be smarter than your counterparties in a swap transaction nor is it 
improper to understand a financial product better than the people 
who invented that product. 

 
106. By engaging in the market manipulation described above, Eisenberg knew, or was 

reckless in not knowing, he was engaged in manipulative, deceptive, and fraudulent conduct, 

because his purchase of MNGO tokens and market manipulation were intended to create the 

false appearance of robust trade volume in MNGO tokens and artificially prop up the token’s 

price, in order to induce market participants to trade in MNGO tokens and drive up the price of 

MNGO tokens, thereby increasing the price of MNGO perpetual futures on Mango Markets and 

causing the price of Eisenberg’s long MNGO perpetual futures position to increase. 

Mango Plans to Launch Mango Markets Version 4.  

107. Version 3 of Mango Markets remains halted. 

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108. However, Mango has been touting the upcoming launch of version 4 of Mango 

Markets on its website and on social media, stating, for example, that the “next generation of 

Mango is on the horizon. With exciting new features and risk mitigation strategies, Mango v4 is 

your one-stop DeFi shop.”  

109. The creators of Mango Markets have been involved in developing the code for 

version 4. 

110. Mango has not announced the launch date. 

FIRST CLAIM FOR RELIEF 
Violations of Exchange Act Section 10(b) and Rules 10b-5(a) and (c) 

 
111. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

110, as though fully set forth therein. 

112. By reason of the conduct described above, Defendant, directly or indirectly, 

acting intentionally, knowingly or recklessly, in connection with the purchase or sale of 

securities, by the use of the means and instruments of interstate commerce or of the mails, 

employed devices, schemes, or artifices to defraud, and engaged in acts, practices, or courses of 

business which operated or would operate as a fraud or deceit upon other persons. 

113. In engaging in the conduct described herein, Defendant acted knowingly and with 

a reckless disregard for the truth. 

114. Eisenberg knew, or was reckless in not knowing, he was engaged in manipulative, 

deceptive, and fraudulent conduct, because, among other things, Eisenberg’s purchases of 

MNGO tokens and market manipulation was intended to create the false appearance of robust 

trade volume in MNGO tokens and artificially prop up the token’s price, in order to induce 

market participants to trade in MNGO tokens and drive up the price of MNGO tokens, thereby 

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increasing the price of MNGO perpetual futures on Mango Markets and causing the price of 

Eisenberg’s long MNGO perpetual futures position to increase. 

115. By virtue of the foregoing, Defendant violated, and unless enjoined will continue 

to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rules 10b-5(a) and 10b-

5(c) [17 C.F.R. § 240.10b-5(a), (c)] promulgated thereunder. 

SECOND CLAIM FOR RELIEF 
Violation of Exchange Act Section 9(a)(2) 

 
116. The SEC repeats, realleges, and incorporates by reference paragraphs 1 through 

110, as though fully set forth therein. 

117. By reason of the conduct described above, Defendant directly or indirectly, by use 

of the mails or any means or instrumentality of interstate commerce, or of any facility of any  

national securities exchange or any member of a national securities exchange, effected, alone or 

with one or more other persons, a series of transactions in securities, creating actual or apparent 

active trading in such securities and/or raising or depressing the price of such securities, for the 

purpose of inducing the purchase or sale of such securities by others, to engage in market 

manipulation that affected the volume and prices of such securities for the purpose of inducing 

the purchase or sale of such securities by others. 

118. Eisenberg acted with the intent to induce trading by others. 

119. By virtue of the foregoing, Defendant violated, and unless enjoined will continue 

to violate, Section 9(a)(2) of the Exchange Act [15 U.S.C. § 78i(a)(2)]. 

PRAYER FOR RELIEF 

         WHEREFORE, the SEC respectfully requests that the Court enter Final Judgment: 

  

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I. 

Finding that Defendant violated the statutes and rules set forth in this Complaint as to 

each; 

II. 

Permanently restraining and enjoining Defendant, and all persons in active concert or 

participation with him, from violating, directly or indirectly, the statutes and rules set forth in this 

Complaint as to each; 

III. 

Order Defendant to disgorge all ill-gotten gains derived from his illegal conduct as set 

forth in this Complaint, including prejudgment interest thereon pursuant to Section 21(d)(3), 

21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. § 78u(d)(3), (d)(5), and (d)(7)];  

IV. 

Order Defendant to pay civil penalties pursuant to Section 21(d)(3) of the Exchange Act 

[15 U.S.C. § 78u(d)(3)];  

V. 
 

Prohibiting Defendant from (i) participating, directly or indirectly, in the purchase, offer, 

or sale of any security, or (ii) engaging in activities for purposes of inducing or attempting to 

induce the purchase or sale of any security; provided, however, that such injunction shall not 

prevent Eisenberg from participating in any employer sponsored retirement plan offered pursuant 

to his employment, pursuant to Section 21(d)(5) of the Exchange Act [15 U.S.C. § 78u(d)(5)];  

VI. 

Grant such other and further relief as the Court determines to be necessary and 

appropriate. 

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VII. 

Retaining jurisdiction over this action to implement and carry out the terms of all orders 

and decrees that may be entered. 

JURY TRIAL DEMAND 
 

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff SEC demands that 

this case be tried to a jury. 

Date:   January 20, 2023   Respectfully submitted, 
 

UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION 

              
      /s/ Alyssa A. Qualls                                               

           Alyssa A. Qualls (AQ-4247) 
Kristin Pauley (KP-7633) 

     Attorneys for Plaintiff 
          United States Securities and Exchange Commission 
           Chicago Regional Office     

          175 West Jackson Blvd., Suite 1450 
          Chicago, Illinois 60604 
          (312) 353-7390 
          (312) 353-7398 (facsimile)   

      [email protected] 
      [email protected] 
 
 
   
                        

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