When a person drains $110 million in the name of a 'legal trading strategy' and claims that the operation fully complies with the agreement's expectations—do you really know where the boundaries of DeFi's rules lie?


Avraham 'Avi' Eisenberg, the self-proclaimed 'smart person' who publicly admitted to launching the Mango Market attack, is facing a request from U.S. federal prosecutors for a maximum of 6.5 years in prison. This is one of the most iconic hacking incidents in the DeFi space and could potentially set a precedent for severe penalties under the dual charges of 'market manipulation + sexual crime' in the Web3 world.


On April 22, U.S. prosecutors submitted sentencing recommendations to a New York court, requesting a sentence of 78 to 97 months for the convicted trader. They emphasized that Eisenberg's actions were not merely 'smart arbitrage', but constituted a triple crime of wire fraud, commodity fraud, and market manipulation, severely impacting the DeFi ecosystem.




In October 2022, Eisenberg exploited a protocol mechanism vulnerability of Mango Market, manipulating the perpetual contract pegged to MNGO and USDC to achieve a false asset inflation + high-leverage lending operation. He repeatedly market-made with two wallet accounts to rapidly increase the price of MNGO, causing personal account assets to inflate. Subsequently, he used these 'inflated assets' to borrow platform funds on a large scale, draining approximately $110 million in treasury funds.


At a time of community outrage, Eisenberg not only did not deny it but also took the initiative to tweet: "This is a legal profit strategy, fully in line with the expectations of the agreement."


Facing community pressure, he ultimately returned about $67 million but still retained over $40 million that he did not return. Although the technical operation on the smart contract was 'flawless', from a legal perspective, his actions essentially crossed into fraud and manipulation.




The complexity of the case goes beyond the financial realm.


Prosecutors pointed out that during the search of Eisenberg’s devices related to market manipulation, evidence of his possession of child pornography was discovered. Relevant court documents show that there were images depicting children under 12 years old. Although this belongs to a separate case, the federal prosecutors clearly stated that this further proves Eisenberg poses a 'continuing danger', reinforcing the reasonableness of his long-term imprisonment.


And this type of non-financial accusation could significantly impact the court's sentencing hearing on May 1. Once the judgment is made, it could become the most severe criminal sentencing case in DeFi history.



Mango Market's shutdown, the community's scars are hard to heal.


Mango Market launched in August 2021 and is a well-known permissionless trading protocol within the Solana ecosystem. However, since the attack in 2022, the platform has continued to suffer a crisis of trust. Although the team attempted to restart services afterward, the platform announced it would cease operations in January 2024 and officially closed in February.


This means: the entire protocol was completely destroyed due to a manipulation event, and the 'error tolerance mechanism' of DeFi governance has once again failed.


According to victim statements, Mango Market currently still has a funding gap of about $47 million. Their representative team stated: 'The returned funds helped some users, but it cannot restore the destruction to the project's reputation.' They also urged the court to impose a heavier sentence on Eisenberg as a deterrent.




The Eisenberg case once again puts the concept of 'code is law' under a magnifying glass.


He is not a black hat hacker and did not bypass any contract vulnerabilities, but rather arbitraged by extreme exploitation of protocol design. The reality is that regardless of whether the smart contract operates reasonably, as long as there is intentional manipulation of the market behind it, it may touch the traditional legal red line.


This is precisely the premise on which regulation gradually intervenes in DeFi. Just because blockchain is a transparent ledger does not mean that someone can use gray methods to drain ecological assets.



How to identify project vulnerabilities? MLion.ai helps you avoid the 'contract logic trap'.


Attacks like those on Mango Market often do not come from 'backdoor vulnerabilities', but rather from design flaws inherent in the protocol model itself. This means ordinary investors find it difficult to judge the true risks of a project with the naked eye.


And this is exactly the core role that Mlion.ai plays in the new generation of crypto research tools:


  • Conduct AI-driven structured analysis of protocol design logic to identify 'potential operational space';


  • Track on-chain abnormal fund behavior, provide real-time alerts for manipulative trading and asymmetric leverage structures;


  • Automatically generate governance voting and project financial change monitoring reports, helping users gain insights into major community developments in real time;


  • Quickly locate the occurrence points of project attacks or controversial behaviors, assess the potential for fund recovery and investment safety.



As DeFi continues to become more complex and financialized, the best way to avoid 'contracts equating to disaster' is to proactively identify composite risks of 'design flaws + game space'.



Conclusion: A case, a liquidation and warning for the industry.


The Avi Eisenberg case, both in terms of the judgment outcome and social response, will become an important node in the history of DeFi development.


This is not only a trial of personal behavior but also a systemic response to the 'extreme testing' of decentralized governance. Protocol designers, investors, and developers all need to understand that Web3 is not an unbounded playground.


Between 'intelligence' and 'compliance bottom line', we are all seeking that balance point. And this sentencing may just be an attempt to mark a coordinate.



Disclaimer: The above content is for information sharing only and does not constitute any investment advice. The market has risks; investors should be cautious.