Mango Markets Exploitation: Was it Market Manipulation or Clever Trading?
Mango Markets Exploitation: Was it Market Manipulation or Clever Trading?
The case stems from a controversial October 2022 hack of Mango Markets. An investigation by journalist Chris Brunet suggested Eisenberg's potential involvement.
The Federal Bureau of Investigation (FBI) subsequently arrested Eisenberg in Puerto Rico in December, charging him with market manipulation.
The case's heart is whether Eisenberg's actions were criminal or simply a clever exploit within the protocol. He used one account to drive up the collateral price, allowing him to borrow much larger sums from the platform with a separate account.
- Eisenberg defended himself, stating his actions were legal open market actions, using the protocol as designed.
- He argued that discrepancies between a protocol's documentation and its code are common, and his actions exploited an unintended consequence.
'Code is Law' Notion Challenged in Court
The Mango Markets case has sparked intense debate in the crypto community. Some defend Eisenberg, arguing the principle of 'code is law' protects traders who exploit loopholes in blockchain platforms.
CFTC Chairman Rostin Behnam has emphasized transparency and engagement with the DeFi industry.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.