Avraham “Avi” Eisenberg’s alleged $110 million exploit of the Solana decentralized exchange Mango Markets is no different from a fake diamond ring scam, prosecutors have claimed.

United States Assistant Attorney Tian Huang said in opening arguments in a Manhattan federal court that Eisenberg’s actions on Oct. 11, 2022, constituted fraud and market manipulation, according to an April 9 Inner City Press X post.

“Consider this scam. A person sells a fake diamond ring, worthless plastic. The con man disappears and runs off. This case is a modern twist on that. That man, Avraham Eisenberg? He ran.”

“He inflated the price of cryptocurrency by 1,000% in 20 minutes. He convinced Mango Markets he owned a lot, and conned Mango Markets,” Huang added.

“He borrowed over $110 million of cryptocurrency,” he continued. “He wasn’t really borrowing it — he was stealing it. He ran off with crypto.”

Eisenberg has long rejected the assertion he exploited Mango Markets and said he “operated a highly profitable trading strategy” and that his actions were “legal open market actions.”

In court, his lawyer Sanford Talkin rejected the claims and explained Eisenberg risked $13 million of his own funds and could have lost it all had the trade failed.

“During this trading strategy, at any moment, he could have lost everything. It was not a sure bet, and it wasn’t a secretive bet. The bet he made could be seen by anyone,” Talkin said.

The Mango Markets exploit occurred out in the open and the public nature of blockchain transactions meant that anyone could have taken the other side of the trade, he added.

“If his counterparties had seen them and opted to, they could have traded against him,” Talkin asserted. “He executed a successful trade.”

In October 2022, Eisenberg inflated the value of the platform’s native token, MNGO, relative to USD Coin (USDC).

He then took out a series of loans against the inflated MNGO price, which drained Mango Markets’ treasury of around $110 million worth of various cryptocurrencies.

Related: ParaSwap DAO votes to compensate hack victims

Days later, on Oct. 15, Mango Markets confirmed that $67 million in various crypto assets had been returned. Eisenberg publicly confessed on X to his actions on the crypto exchange, saying he believed they were legal and permitted by the platform's smart contract.

Despite some of the funds being returned, the team behind Mango Markets sued Eisenberg for $47 million in damages plus interest.

Crypto lawyer weighs consequences

The final ruling on Eisenberg’s case could be more important to the future of the crypto industry than the criminal trial for Sam Bankman-Fried, said crypto lawyer Gabriel Shapiro in an April 9 X post.

Shapiro, the general counsel at Delphi Labs, said he was “fine” with the government’s charge that Eisenberg committed market manipulation but took issue with the specifics around Eisenberg’s requirements.

“The problematic claim against Avi is that he breached some kind of loan agreement implied in his use of the protocol — this is absurd [and] not how DeFi works,” Shapiro wrote.

“Imagine you get liquidated on Aave, but the network was congested, the price of your collateral fell too much and thus the protocol got bad debt — do you want AaveDAO to be able to sue you to collect the debt?”

Magazine: ‘SEAL 911’ team of white hats formed to fight crypto hacks in real time