2 years ago
Avi Eisenberg’s apprehension connected commodities fraud charges for the Mango Markets exploit raised eyebrows connected crypto Twitter and required immoderate processing to enactment done its intricacies.
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Avraham Eisenberg was arrested successful Puerto Rico connected Dec. 26 connected commodities fraud and manipulation charges relating to the $110 cardinal exploit of the decentralized Mango Markets exchange. Eisenberg had self-identified arsenic the actor down what helium called a “highly profitable trading strategy” and insisted that helium had taken “legal unfastened marketplace actions, utilizing the protocol arsenic designed.”
Eisenberg’s apprehension predictably lit up crypto Twitter, with immoderate observers paying peculiar attraction to the information that commodities fraud charges were being pressed successful a lawsuit involving a crypto coin:
“AVRAHAM EISENBERG, the defendant, willfully and knowingly, straight and indirectly, utilized and employed, and attempted to usage and employ, successful transportation with a swap, a declaration of merchantability of a commodity successful interstate and overseas commerce.”looks similar the Department of Justice is calling MNGO and/or CRV commodities (and not securities)!!!! pic.twitter.com/ZklOlubR8u
— scott (@scott_lew_is) December 27, 2022Eisenberg had manipulated the terms of the exchange’s MNGO coin comparative to the USDC (USDC) stablecoin and past took retired loans against his collateral. For this, Eisenberg was charged with commodities fraud. In the charges against Eisenberg, U.S. Federal Bureau of Investigation peculiar bureau Brandon Racz wrote:
“I recognize that virtual currencies, specified arsenic USDC, are ‘commodities’ nether the Commodity Exchange Act.”DoJ: "USDC is simply a Commodity"
Guy: "See! Shitcoins similar Mango are a commodity, thats wholly what the DoJ said."
This is wherefore you wage lawyers folks. Do not bash your ain lawyer-ing astatine home, you volition get rekt. https://t.co/N9n7k4UdzK
The agent’s knowing that stablecoins are commodities is lone partially backed up by authorities policy, though it cites the McDonnell lawsuit prosecuted by the U.S. Commodities Futures Trading Commission (CFTC) arsenic precedent. The assertion that USDC is simply a commodity is not arsenic arguable arsenic claiming the aforesaid for MNGO, but whitethorn person bee a conscious choice.
(4) the information that the lawsuit doesn't qualify the applicable tokens arsenic securities is not successful immoderate mode bullish/positive and simply arises from litigation strategy--the less predicate issues the govt has to litigate successful its case, the better
— _gabrielShapir0 (@lex_node) December 27, 2022The ineligible strategy down the DOJ’s prime of the Commodity Exchange Act (CEA) to prosecute the lawsuit seemed to beryllium grounded successful expediency. For 1 thing, the CEA addresses terms manipulation directly.
Related: Hackers copied Mango Markets attacker’s methods to exploit Lodestar — CertiK
In addition, the CFTC is often seen arsenic taking a softer attack to crypto regularisation than the SEC, though that cognition is disputable.
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