The US accuses a crypto trader of fraud in the Mango Markets case

US prosecutors have filed criminal charges against a cryptocurrency trader accused of trying to steal more than $100 million from the Mango Markets exchange, as authorities step up their crackdown on digital asset markets.

Late Tuesday, authorities in the Southern District of New York announced they had filed commodities fraud and commodity manipulation charges against Avraham Eisenberg for allegedly helping to artificially inflate futures prices tied to Mango's own token in October.

Eisenberg was arrested in Puerto Rico on Dec. 26, according to a separate court filing from U.S. Attorney Damian Williams.

The charges cap a year of unprecedented controversy for the crypto markets. The price collapse of popular tokens like Bitcoin has wiped more than $2 trillion in value from the market and pushed many big names into bankruptcy. In November, the industry was shaken to its core when FTX – a former well-known crypto brand – went bankrupt. Sam Bankman-Fried's top associates pleaded guilty in the US.

Eisenberg's allegations represent a step forward by US authorities in the world of decentralized finance, where networks have no central decision-making authority. Instead, many networks rely on consensus among members and automate the network's rules into computer code.

In October, Mango, a decentralized marketplace, announced that it had been hacked for more than $100 million and the incident had drained all of its available equity.

U.S. authorities alleged that Eisenberg used two accounts at Mango to artificially inflate the price of Mango perpetual swaps, a type of futures contract. In about 20 minutes, Eisenberg drove up the price of MNGO Perpetuals by 1,300 percent, the complaint says. Eisenberg did not immediately respond to a request for comment.

"Because Mango Markets allows investors to borrow and withdraw cryptocurrency based on the value of their assets on the platform, the increase in value of the MNGO Perpetuals that Eisenberg purchased enabled Eisenberg to borrow and then withdraw approximately $110 million in various cryptocurrencies . . . that came from deposits from other investors," Brandon Racz, an agent with the Federal Bureau of Investigation, said in the filing.

Shortly after the Eisenberg incident wrote on Twitter that he was involved in a team that pursued a “highly profitable trading strategy.” He added that he believes that “all of our actions are legal open market actions, using the protocol as designed, even if the development team did not foresee all the consequences of setting the parameters as they are.”

Eisenberg also said he negotiated an agreement with Mango's insurance fund to help refund users and recapitalize the exchange. Mango received $67 million in return, U.S. prosecutors alleged.

Racz claimed that Eisenberg flew from the United States to Israel the day after his trade. “Based on the timing of the flight, the trip appears to have been an attempt to avoid arrest by law enforcement in the immediate aftermath of the market manipulation scheme,” he said.