Office of Public Affairs | Man Convicted for $110M Cryptocurrency Scheme | United States Department of Justice

[Gunnar Larson]

https://www.justice.gov/opa/pr/man-convicted-110m-cryptocurrency-scheme

Justice Department’s First Cryptocurrency Open-Market Manipulation Case
A federal jury in New York convicted a man residing in Puerto Rico today of
commodities fraud, commodities market manipulation, and wire fraud in
connection with the manipulation on the Mango Markets decentralized
cryptocurrency exchange.

According to court documents and evidence presented at trial, Avraham
Eisenberg, 28, engaged in a scheme to fraudulently obtain approximately
$110 million worth of cryptocurrency from Mango Markets and its customers
by artificially manipulating the price of certain perpetual futures
contracts.

“Avraham Eisenberg executed a manipulative trading scheme on a
cryptocurrency exchange, defrauding the exchange and its investors out of
$110 million,” said Principal Deputy Assistant Attorney General Nicole M.
Argentieri, head of the Justice Department’s Criminal Division.
“Manipulative trading puts our financial markets and investors at risk.
This prosecution—the first involving the manipulation of cryptocurrency
through open-market trades—demonstrates the Criminal Division’s commitment
to protecting U.S. financial markets and holding wrongdoers accountable, no
matter what mechanism they use to commit manipulation and fraud.”

“Moments ago, Avraham Eisenberg was found guilty by a unanimous jury in the
first-ever cryptocurrency open-market manipulation case,” said U.S.
Attorney Damian Williams for the Southern District of New York. “This
ground-breaking prosecution epitomizes this office’s ability to employ
innovative methods and cutting-edge law enforcement tools to continue to
protect all financial markets. The career prosecutors of this office
continue their expertise in prosecuting financial fraud, one of our core
priorities, and would-be financial criminals should think twice before
daring to engage in illicit conduct on our watch.”

“The FBI and its partners will not stand by when criminals engage in
illicit activity at the expense of the American people and our financial
institutions,” said Executive Assistant Director Timothy Langan of the
FBI’s Criminal, Cyber, Response, and Services Branch. “If you engage in
fraudulent activity, whether that be in the cryptocurrency space or through
other forms of market manipulation, you will be held accountable for your
ill-gotten gains.”

Eisenberg is scheduled to be sentenced on July 29 and faces a maximum
penalty of 10 years in prison on the commodities fraud count and the
commodities manipulation count, and a maximum penalty of 20 years in prison
on the wire fraud count. A federal district court judge will determine any
sentence after considering the U.S. Sentencing Guidelines and other
statutory factors.

The FBI investigated the case, with assistance from Homeland Security
Investigations and IRS Criminal Investigation.

Trial Attorney and Special Assistant U.S. Attorney Tian Huang of the
Criminal Division’s Fraud Section, a member of the National Cryptocurrency
Enforcement Team (NCET), and Assistant U.S. Attorneys Thomas Burnett and
Peter Davis for the Southern District of New York are prosecuting the case.

The NCET was established to combat the growing illicit use of
cryptocurrencies and digital assets. Within the Criminal Division’s
Computer Crime and Intellectual Property Section, the NCET conducts and
supports investigations into individuals and entities that are enabling the
use of digital assets to commit and facilitate a variety of crimes, with a
particular focus on virtual currency exchanges, mixing and tumbling
services, and infrastructure providers. The NCET also works to set
strategic priorities regarding digital asset technologies, identify areas
for increased investigative and prosecutorial focus, and lead the
department’s efforts to collaborate with domestic and foreign government
agencies as well as the private sector to aggressively investigate and
prosecute crimes involving cryptocurrency and digital assets.
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