The Commodity Futures Trading Commission is suing Avraham Eisenberg, aka Mango Avi, over alleged manipulation of swaps on Mango Markets, a decentralized exchange on the Solana blockchain.
The new complaint from the CFTC notes "a manipulative and deceptive scheme to artificially inflate the price of swaps offered by Mango Markets."
Specifically, Eisenberg managed to inflate the native MNGO token relative to stablecoin USDC by buying the small-cap token in bulk. Its price spiked by 1,300% in October as a result. Eisenberg and his team were then able to use the inflated MNGO as collateral to take out more USDC on loans — all of which he admitted to, while maintaining that his actions were legal.
Eisenberg is already in custody and facing criminal manipulation charges from the Department of Justice. By joining in, the CFTC is saying that swaps — even on decentralized exchanges — in at least some cryptocurrencies are part of its remit as a regulator.
The CFTC is under pressure in the aftermath of FTX's bankruptcy. Up until its collapse, FTX was pushing a bill in Congress that would give the CFTC a bigger role in crypto markets, a push that the CFTC and its commissioners joined.
With former FTX CEO facing criminal charges, the CFTC is fighting accusations of regulatory capture by ill-doers. Chairman Rostin Behnam is still defending the bill's central push, but he and the other commissioners are eager to demonstrate that the regulator is capable of holding crypto companies and other actors to account.
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