First US Cryptocurrency Manipulation Conviction

A person who trades cryptocurrency was found guilty of using sneaky tactics to make futures contracts seem more valuable than they were. They might get up to 20 years in jail.

A big decision was made by a federal jury in New York, the previous week. They found Avraham Eisenberg guilty of doing something wrong. The case, the first of its kind in the US, was about taking advantage of flaws in Mango Markets, a decentralized exchange (DEX), and intended to get $110 million worth of cryptocurrency fraudulently. Eisenberg used spammy trading methods to target perpetual future contracts on the platform. He did this so that he could borrow plenty of other cryptocurrencies from Mango Markets, effectively leveraging the inflated value of his holdings.

The investigation that led to the conviction consisted of the collaboration between the Federal Bureau of Investigation (FBI), Homeland Security Investigations, and Internal Revenue Service (IRS) Criminal Investigation. The National Cryptocurrency Enforcement Team (NCET) also helped these organizations to stop people from misusing cryptocurrencies. This special team aims to find spammers and agencies that use digital money for crimes. They focus on things like virtual money exchanges, money laundering services, and infrastructure providers. Moreover, the NCET also plans what to focus on next in the digital-asset field, and fosters collaboration between different government agencies and the private sector to fight crimes related to cryptocurrency.

News of the verdict was announced by bullish statements from the US authorities. The Deputy Assistant Attorney General, Nicole Argentieri, said in an interview that it’s very necessary to punish people who mess with financial markets, whether they are traditional or digital. She highlighted the Department of Justice’s commitment to protecting financial systems and said, “Manipulative trading puts our financial markets and investors at risk”.

Damian Williams, a US Attorney for the Southern District of New York, agreed with Argentieri. He called the case “groundbreaking” because it’s the first of its kind. He appreciated the prosecutors who worked on the case, saying they were experts at stopping financial fraud, which is a big focus for them. He also warned anyone thinking about doing something like this in the future to reconsider because they will get caught.

Law enforcement officials also spoke up about the case. Timothy Langan, who is an important person at the FBI, said they’re committed to going after people who cheat financial institutions to make themselves rich. He warned that if you do something fraudulent, whether it’s in cryptocurrency or any other market, you’ll have to pay for it.

Eisenberg could get up to 20 years in prison. The sentencing will happen on July 29th. The case was handled by Tian Huang, who is part of the National Cryptocurrency Enforcement Team (NCET), and some other lawyers from the Southern District of New York.

This case shows that the US government is serious about stopping shady practices in the new digital money world. It also shows they can change the rules to punish people who break them. But it’s likely to lead to more talks about how to control decentralized exchanges like Mango Markets.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button