Avraham Eisenberg, the individual recently convicted of fraud and market manipulation in connection with the $110 million exploit of the Solana-based DeFi platform Mango Markets, now faces additional charges of possessing child pornography.
The new allegations, detailed in court documents dated April 3 and made public on April 26, assert that Eisenberg had images of prepubescent minors, including some under the age of 12, on his electronic devices.
TLDR
- Avraham Eisenberg, who was recently found guilty of fraud and market manipulation in the $110 million Mango Markets heist, has been charged with possession of child pornography.
- FBI agents first discovered the material during a search of Eisenberg’s devices in January 2023, related to the original charges of market manipulation and fraud.
- The court documents allege that some of the images in Eisenberg’s possession were of prepubescent minors under the age of 12.
- Eisenberg was arrested in Puerto Rico in December 2022 and has been held in U.S. custody since January 2023.
- If found guilty of the child pornography charges, Eisenberg could face up to an additional 10 years in prison.
The child pornography charges came to light following an initial search of Eisenberg’s cell phones and laptops by the United States Federal Bureau of Investigation (FBI) in January 2023.
The search was conducted as part of the ongoing investigation into Eisenberg’s role in the Mango Markets exploit, which occurred on October 11, 2022. During this preliminary examination, law enforcement officials discovered the presence of sexually explicit images depicting minors on Eisenberg’s devices.
In response to this discovery, the FBI sought and obtained a second warrant in February 2023, expanding the scope of the original search to include evidence related to the possession and receipt of child pornography.
The court filing alleges that Eisenberg had been in possession of and transferred the illegal material between 2017 and 2022.
Eisenberg’s legal troubles began in October 2022 when he orchestrated a scheme that drained approximately $110 million from Mango Markets’ treasury.
He later claimed that the exploit was a “highly profitable trading strategy” executed within the confines of the protocol’s intended design and legality.
However, prosecutors alleged that Eisenberg manipulated the value of futures contracts tied to Mango’s token MNGO and the stablecoin USD Coin, inflating the value of his contracts by 1,300% within a mere 20 minutes. This allowed him to withdraw $110 million in various cryptocurrencies.
Following the attack, Eisenberg agreed to return $67 million to Mango Markets in exchange for other token holders refraining from pursuing legal action or freezing his assets.
Despite this agreement, he was arrested in San Juan, Puerto Rico, on December 26, 2022, and has been in U.S. custody since January 2023.
On April 18, a Manhattan federal court found Eisenberg guilty of fraud and market manipulation for his role in the Mango Markets exploit.
The Commodity Futures Trading Commission also added two counts of market manipulation to the charges filed by the FBI. A judge is set to announce Eisenberg’s sentencing for these crimes at a July 29 hearing, where he could face up to 20 years in prison.
The emergence of child pornography charges against Eisenberg adds a new dimension to his legal troubles and raises serious concerns about his character.
If found guilty of the child pornography charges, Eisenberg could face an additional 10 years in prison, as simple possession of child pornography carries a maximum sentence of 10 years under the U.S. penal code.