Mango Markets was drained of $110M by its own collateral rule

Mango Markets was a decentralized lending platform where users could borrow against crypto collateral — and the value of that collateral was derived from prices on the platform's own perpetual futures markets, including its native token, MNGO. On 11 October 2022, trader Avraham Eisenberg exploited that design with two anonymous accounts: one sold a massive volume of MNGO perpetual futures while the other bought them, effectively trading with himself to create immense upward price pressure. The price of MNGO rose more than 1,000% in under an hour.

Because the smart contracts used the inflated MNGO price to determine borrowing power, Eisenberg's collateral value ballooned with the pump. He then borrowed against it and drained approximately $110 million worth of various cryptocurrencies from the protocol. Moments after the theft, he fled the United States. US Attorney Damian Williams called the scheme 'a brazen, old-fashioned con, but with a new-age twist'; the defense answered that Eisenberg had merely stress-tested a permissionless platform, an argument summarized as 'code is law.'

On 18 April 2024 a federal jury in Manhattan convicted Eisenberg of commodities fraud, commodities manipulation and wire fraud. Then on 23 May 2025 Judge Arun Subramanian vacated all three convictions: because the platform was permissionless and automatic, prosecutors had failed to prove materially false representations; the wire fraud count was dismissed on the ground that the behavior did not violate wire fraud law; and New York was ruled an improper venue. The Justice Department was left to decide whether to retry, while separate SEC and CFTC civil cases remained pending.