The fine print of court documents detailing the arrest and charging of the Mango Markets exploiter with fraud and market manipulation has revealed previously unnoticed details of how he carried out his scheme of profiting from the manipulation of the MNGO/USD perpetual contract.

Eisenberg Used a Crypto Account Verified Using the Credentials of a Ukrainian Womanmango

According to the statement of Federal Bureau of Investigation (FBI) Special Agent Brandon Racz, the defendant, Avraham Eisenberg, opened an account on a crypto exchange around September 19th 2022, ‘using a passport and personal identifying information that appears to belong to a Ukrainian woman, along with a particular Gmail address.’

He added that the Gmail account was created ‘on or about September 1st 2022,’ with a recovery email of [email protected] and a phone number, both belonging to Avraham Eisenberg.

Special Agent Racz explained that Eisenberg used the trading account to receive 12 million USDC, then sold for over 16 million MNGO. This trade caused the price of MNGO to rise from $0.0388 to a peak value of $0.1557, kickstarting the sequence of events that led to Mango Markets DeFi protocol losing an estimated $114 million.

Eisenberg’s Case Highlights a Common Practise of Individuals Purchasing Verified Crypto Trading Accounts

Eisenberg using a trading account verified using the information of a Ukrainian woman, brings to light an often-used technique of traders buying crypto exchange accounts to circumvent jurisdictional restrictions.

Such incidences were common when Bitmex and Binance started banning US crypto traders from their platforms due to regulatory pressure from the CFTC and SEC.

The purchased verified accounts were then used alongside a stable VPN to access the blocked trading platform, providing access to tokens and services such as futures trading, usually prohibited in the United States.

Americans Who Traded on FTX International Using Fake Accounts Might Not Get Compensated — Su Zhu

Su Zhu, the co-founder of defunct crypto hedge fund Three Arrows Capital, has also chimed in on the fact that Eisenberg used the credentials of a Ukrainian woman to trade on a crypto exchange.

Mr Zhu pointed out that Americans most likely used fake KYC credentials to trade on FTX, concluding that they might not get compensated once the bankruptcy proceedings are over.

‘One reason I’m pretty bullish on FTX claims is [because] people are vastly underestimating what % of Americans who traded on FTX did so with fake KYC. These people won’t even be able to file claims,’ Su Zhu explained in a Tweet.

(By John P. Njui)