UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

COMMODITY FUTURES TRADING 

COMMISSION, 

Plaintiff,

v. 

AVRAHAM EISENBERG

Defendant. 

Case No. 23-cv-00173 

ECF Case

COMPLAINT FOR INJUNCTIVE 

AND OTHER EQUITABLE RELIEF 

AND FOR CIVIL MONETARY 

PENALTIES UNDER THE 

COMMODITY EXCHANGE ACT 

AND COMMISSION REGULATIONS

JURY TRIAL DEMANDED

I. INTRODUCTION

1. Between in or around October 11, 2022 and October 15, 2022 (“Relevant 

Period”), Avraham Eisenberg (“Eisenberg” or “Defendant“) engaged in a manipulative and 

deceptive scheme to artificially inflate the price of swaps offered by Mango Markets, a 

decentralized digital asset exchange, culminating in the misappropriation of over $100 million 

from the platform. 

2. During the Relevant Period, Mango Markets offered to enter into, entered into, 

executed, and/or confirmed the execution of several different types of digital asset transactions, 

including derivatives and other leveraged, margined, or financed digital asset transactions. 

Mango Markets offered derivative contracts that constitute swaps under the Act, (the “MNGOUSDC Swaps”), referred to as “perpetual contracts” or “perpetual futures” on the platform. The 

MNGO-USDC Swaps were based on the relative value between two digital assets: (1) MNGO, a 

“native” token of Mango Markets, and (2) USDC, a stablecoin. Mango Markets also allowed 

users to engage in transactions it described as “borrowing,” which allowed users to withdraw 

digital assets, including commodities in interstate commerce such as bitcoin, ether, and Tether,

from the exchange with an obligation to “deposit or trade for the borrowed asset.” The 

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maximum amount available to borrow was primarily based on, among other things, the value of 

the borrower’s assets held on Mango Markets. 

3. The goal of Defendant’s scheme was straightforward: to artificially inflate the 

value of his swap contract holdings on Mango Markets through price manipulation, so that he

could “borrow” a significant amount of digital assets that he had no intention to repay. 

Defendant accomplished this scheme by manipulating the price of MNGO and, ultimately, the 

price of MNGO-USDC Swaps, through a type of scheme often referred to as “oracle 

manipulation.” 

4. An oracle is a program that pulls data from an off-blockchain source and brings it 

onto the blockchain so that it may be used by smart contracts. Mango Markets used an oracle 

(“Oracle”) that pulled market price data from three different exchanges (“Exchange 1,” 

“Exchange 2,” and “Exchange 3,” and collectively, the “Oracle Exchanges”). The prices from 

the Oracle determined the market prices of assets on Mango Markets, including the price of 

MNGO and USDC. 

5. In furtherance of his manipulative and deceptive scheme, Defendant purchased 

over 400 million MNGO-USDC Swaps on Mango Markets with a position size of approximately 

$19 million. The price of MNGO-USDC Swaps was based on the price of MNGO and USDC 

traded on the Oracle Exchanges. During the Relevant period, MNGO was a relatively illiquid 

asset, meaning that large transactions in MNGO would likely impact its price. After establishing 

his MNGO-USDC Swap position, Defendant bought large quantities of MNGO on the Oracle 

Exchanges over a span of less than thirty minutes. Defendant intended these purchases to 

cause—and they did in fact cause—the price of MNGO to spike briefly to highly inflated 

artificial levels on each of the Oracle Exchanges. As a result, based on the inflated inputs from 

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the Oracle, the price of MNGO on Mango Markets jumped over 13-fold from about $0.04 to 

$0.54 per MNGO during this thirty-minute span. The spike in MNGO caused a similar 

contemporaneous spike in the value of Defendant’s MNGO-USDC Swaps. Using the inflated 

value of his MNGO-USDC Swaps as collateral, Defendant “borrowed” from Mango Markets 

several digital assets, including bitcoin, ether, and Tether, totaling $114 million, comprising 

virtually all of Mango Markets’s available liquidity. 

6. The value of Defendant’s collateral, however, was an illusion caused by his 

manipulation. After “borrowing” digital assets from Mango Markets, Defendant transferred the 

borrowed digital assets out of his Mango Markets account and ceased his manipulation of 

MNGO and the MNGO-USDC Swaps. The price of MNGO quickly declined below its premanipulation level, and the value of his MNGO-USDC Swaps declined in tandem. As a result, 

Defendant’s borrowings became significantly undercollateralized, and Mango Markets was left 

holding a mostly empty bag. 

7. Through this conduct, Defendant has engaged, is engaging, or is about to engage 

in fraudulent and manipulative acts and practices in violation of the Commodity Exchange Act 

(“Act”), 7 U.S.C. §§ 1–26, and Commission Regulations (“Regulations”), 17 C.F.R. pts. 1–190 

(2022), specifically Sections 6(c)(1), 6(c)(3), and 9(a)(2) of the Act, 7 U.S.C. §§ 9(1), (3), 

13(a)(2), and Regulations 180.1(a)(1)-(3) and 180.2, 17 C.F.R. §§ 180.1(a)(1)-(3), 180.2 (2022). 

8. Accordingly, pursuant to Section 6c of the Act, 7 U.S.C. § 13a-1, the Commission 

brings this action to enjoin such acts and practices and compel compliance with the Act. In 

addition, the Commission seeks civil monetary penalties and remedial ancillary relief, including, 

but not limited to, trading bans, restitution, disgorgement, rescission, pre- and post-judgment 

interest, and such other relief as the Court may deem necessary and appropriate.

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9. Unless restrained and enjoined by this Court, Defendant is likely to continue to 

engage in the acts and practices alleged in this Complaint and similar acts and practices, as more 

fully described below. 

II. JURISDICTION AND VENUE 

10. Jurisdiction. This Court has jurisdiction over this action under 28 U.S.C. § 1331 

(federal question jurisdiction) and 28 U.S.C. § 1345 (district courts have original jurisdiction 

over civil actions commenced by the United States or by any agency expressly authorized to sue 

by Act of Congress). In addition, Section 6c(a) of the Act, 7 U.S.C. § 13a-1(a), authorizes the 

Commission to seek injunctive and other relief against any person whenever it appears to the 

Commission that such person has engaged, is engaging, or is about to engage in any act or 

practice constituting a violation of any provision of the Act or any rule, regulation, or order 

thereunder. 

11. Venue. Venue properly lies with the Court pursuant to Section 6c(e) of the Act, 

7 U.S.C. § 13a-1(e), because Defendant is found in, inhabits, or transacts business in this 

District, and because acts and practices in violation of the Act occurred, are occurring, or are 

about to occur, within this District. 

III. THE PARTIES

12. Plaintiff Commodity Futures Trading Commission (“Commission” or 

“CFTC”) is an independent federal regulatory agency that is charged by Congress with the 

administration and enforcement of the Act and Regulations. The Commission maintains its 

principal office at Three Lafayette Centre, 1155 21st Street, N.W. Washington, D.C. 20581 and 

its Eastern Regional Office at 290 Broadway, 6th Floor, New York, NY 10007. 

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13. Defendant Avraham Eisenberg, of Suffern, New York and/or San Juan, Puerto 

Rico, is a natural person currently in federal custody in connection with an action pending in the 

Southern District of New York. Eisenberg has never been registered with the Commission. 

IV. FACTS

A. Overview of Digital Assets

14. A digital asset is anything that can be stored and transmitted electronically and 

has associated ownership or use rights. Digital assets include virtual currencies, such as bitcoin 

(BTC), ether (ETH), and USD Coin (USDC), which are digital representations of value that 

function as mediums of exchange, units of account, and/or stores of value. 

15. USDC is a type of virtual currency called a “stablecoin,” meaning that it is

supposed to be redeemable on a 1:1 basis with the U.S. dollar. It is the second-largest stablecoin 

by market capitalization, with billions of dollars of USDC changing hands every day. It 

functions primarily as a store of value, a unit of account, and a medium of exchange for the 

purchase of goods and services and the purchase of other digital assets. Circle, the company that 

created and, as part of a consortium, manages USDC, represents that USDC is backed 100% by 

reserves. Certain digital assets are “commodities” in interstate commerce, including BTC, ETH, 

USDC, and others, as defined under Section 1a(9) of the Act, 7 U.S.C. § 1a(9). 

16. Although USDC is intended to be redeemable on a 1:1 basis with the dollar, in 

actuality it does not track the dollar exactly. Since its inception in 2018, the price of USDC has 

ranged between $0.89 and $1.19. Stablecoins are also subject to risks. One such risk is that

stablecoins can be vulnerable to runs, in which a sudden spike in redemption requests triggers 

concerns that the stablecoin issuer may not be able to meet future redemption requests in full. In 

such instances, a stablecoin may break its “peg” to the U.S. dollar and begin trading lower. 

Stablecoins are also susceptible to operational risks, including fraud and cyber risks. 

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17. A “blockchain” is a distributed, shared, immutable ledger that facilitates the 

process of recording transactions and tracking digital assets in a consensus-based network. 

18. A “smart contract” is a self-enforcing piece of computer code that can contain all 

terms of a contract—meaning the software can execute the agreement contained in the contract 

without additional input from the parties.

B. Mango Markets and Swaps

19. Mango Markets is a so-called decentralized digital asset exchange. It was built on 

the Solana blockchain and launched in early 2021 by developers located in the United States and 

overseas. It suspended operations shortly after Defendant’s manipulative and deceptive scheme

drained the platform of most of its assets. 

20. During the Relevant Period, Mango Markets operated a collection of smart 

contracts that purported to facilitate digital asset transactions without the need for intermediaries. 

Mango Markets operated through a website that was accessible to the general public, including 

to persons in the Southern District of New York. The exchange was developed and operated in 

part from within the United States by persons and entities residing in and based in the United 

States. 

21. Mango Markets purports to be governed by a decentralized autonomous 

organization (“DAO”) called the Mango DAO. At least one member of the Mango DAO resides 

in the United States. 

22. During the Relevant Period, Mango Markets users could engage in spot and 

margined trading of digital assets such as bitcoin, ether, and USDC. Mango Markets users could 

also trade MNGO, the “native” token of Mango Markets. The MNGO token traded globally, 

including on digital asset exchanges accessible to persons in the United States, during the 

relevant period. MNGO functions as the governance token of the Mango DAO, meaning that 

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MNGO token holders may vote those tokens to govern (e.g., to modify, operate, market, and take 

other actions with respect to) Mango Markets. It is conveyed as a “reward” to market makers for 

providing liquidity to Mango Markets’s swaps markets. MNGO holders receive a one basis 

point discount on trading fees on the exchange. And MNGO can be deposited with Mango 

Markets to earn interest. 

23. In addition to spot and margined trading of digital assets, Mango Markets 

operated a platform for the trading of swaps. During the Relevant Period, Mango Markets 

offered to enter into, entered into, executed, and/or confirmed the execution of swaps and 

conducted business in the United States for the purpose of soliciting or accepting orders for or 

otherwise dealing in swaps. Of relevance here, Mango Markets allowed users to execute 

MNGO-USDC Swaps, which provide for the exchange of one or more payments based on the 

relative value of MNGO and USDC. “Perpetual futures” and “perpetuals” such as the MNGOUSDC Swaps meet the definition of “swaps” under the Act. 7 U.S.C. § 1a(47); 17 C.F.R. § 1.3. 

24. Swaps like the MNGO-USDC Swaps transfer, as between the parties to the 

transaction, the financial risk associated with a future change in one or more commodities 

without conveying a current or future direct or indirect ownership interest in those commodities. 

Unlike many futures and swaps, “perpetuals” have no expiration date. 

25. The price of a “perpetual” closely tracks the price of the underlying assets. An 

investor with a long position in this type of swap will profit if the value of the underlying asset 

increases and lose money if the value of the underlying asset decreases. Conversely, an investor 

with a short position in this swap will lose money if the value of the underlying asset increases 

and profit if the value of the underlying asset decreases. 

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26. Mango Markets’s swap contracts, including the MNGO-USDC Swaps, operated 

through smart contracts and did not require that any user provide any identifying information like 

a name or address. The MNGO-USDC Swaps settled in USDC, meaning that proceeds from the 

swaps were paid in USDC.

27. In addition to trading, Mango Markets allowed users to engage in digital asset 

transactions it called “borrowing and lending.” Mango Markets’s borrowing and lending 

functionality allowed users to deposit various digital assets as “collateral,” and to withdraw other 

digital assets up to a certain amount depending on the amount of collateral. The maximum 

amount available to “borrow” was primarily based on, among other things, the amount of 

deposited collateral and the value of the borrower’s portfolio on Mango Markets.

28. Mango Markets had a DAO-controlled reserve fund that provided a partial 

backstop to lenders in the event that the collateral of a liquidated account was insufficient to 

cover the borrowed amount. 

C. Eisenberg’s Manipulative and Deceptive Scheme

29. On October 11, 2022, while located within the United States, Eisenberg 

manipulated the spot price of MNGO and the value of MNGO-USDC Swaps in order to illicitly 

obtain approximately $114 million from Mango Markets. 

30. The Oracle employed by Mango Markets provided a data feed of digital asset

prices sourced from the three Oracle Exchanges. It averaged digital asset prices from the Oracle 

Exchanges, and Mango Markets used the resulting average prices to set trading prices on its own 

platform. By virtue of the Oracle, a change in the price of MNGO or USDC on Exchanges 1, 2, 

or 3 would cause a change in price of MNGO or USDC on Mango Markets and also a 

corresponding change in price of MNGO-USDC Swaps. 

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31. Prior to October 11, 2022, Eisenberg created two anonymous accounts at Mango 

Markets and funded each with $5 million in USDC. In one account (“Account 1”), Eisenberg 

established a $19 million long position (using leverage) consisting of over 400 million MNGOUSDC Swaps at a price of approximately $0.04. And in the second account (“Account 2”), 

Eisenberg established a $19 million short position consisting of the same number of MNGOUSDC Swaps. In this way, Defendant placed himself on both sides of the same transaction, 

which effectively resulted in a “wash” transaction. Because Mango Markets did not require any 

identifying information in order to trade on the platform, Eisenberg was able to create both 

accounts anonymously, thereby concealing from Mango Markets the fact that he was on both 

sides of this transaction. 

32. On October 11, 2022, Defendant bought large volumes of MNGO on each of the 

three Oracle Exchanges during the same 30-minute period. Defendant’s choice of exchanges 

was no coincidence: he chose to trade on the Oracle Exchanges because he knew that inflating 

the price of MNGO on those exchanges would cause the Oracle to report artificial prices to 

Mango Markets, and Mango Markets would use those artificial prices to value Defendant’s 

MNGO-USDC Swaps. Defendant further knew that MNGO was relatively illiquid (i.e., it had a 

low trade volume), and therefore his purchases of MNGO on the Oracle Exchanges would 

substantially inflate the price of MNGO on each exchange. 

33. In furtherance of his fraudulent scheme, Defendant opened his account at 

Exchange 1 using a false name and false identification. 

34. Defendant opened an account on Exchange 2 on October 11, 2022. To open the 

account, Defendant used an anonymous email address, did not provide his name, and used a 

virtual private network (“VPN”) that falsely or misleadingly showed his location as Poland. 

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Between October 1 and October 10, MNGO traded in a narrow range of approximately $0.04.1 

Shortly thereafter, between approximately 6:26 p.m. and 6:45 p.m., Defendant paid over $75,000 

for over 1 million MNGO on Exchange 2. During that time, the price of MNGO rose over tenfold on Exchange 2 from approximately $0.04 to $0.45. Daily 24-hour MNGO trade volumes on 

Exchange 2 between October 1 and October 10 ranged between 2.5 million and 3.2 million—on 

average, approximately 120,000 per hour. Defendant’s purchase of over 1 million MNGO in a 

30-minute span on Exchange 2 was therefore highly anomalous. During the rest of October, 

between October 12 and October 31, MNGO traded between approximately $0.015 and $0.029. 

35. Defendant engaged in a similar pattern of large purchases of MNGO on 

Exchanges 1 and 3 in the same short timeframe. As a result of Defendant’s large purchases, the 

price of MNGO rose from approximately $0.04 to artificial prices of $0.13 on Exchange 1 and 

$0.91 on Exchange 3 at or around 6:45 p.m. on October 11, 2022. 

36. Through these transactions on the Oracle Exchanges, Defendant intended to 

generate false or misleading signals of legitimate market demand for MNGO. Defendant further 

intended for his trading to cause (and did cause) significant short-term impacts on the prevailing 

price of MNGO on the Oracle Exchanges and intended to cause (and did cause) artificial prices 

for MNGO on those exchanges. 

37. Defendant knew that the price of MNGO-USDC Swaps was based on the prices 

of MNGO and USDC determined by the Oracle, which in turn were based on the prevailing spot 

market prices at the Oracle Exchanges. Through his manipulation of MNGO, Defendant further 

intended to cause (and did cause) a significant short-term impact on the price and value of his 

 

1 Prices on the Oracle Exchanges and on Mango Markets were variously quoted in U.S. dollars, USDT 

(another stablecoin), and USDC. For simplicity, to avoid confusion, and because the prices of USDT and USDC 

approximated $1.00 during the Relevant Period, this Complaint generally quotes prices in U.S. dollars. 

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long MNGO-USDC Swaps held at Mango Markets and intended to cause (and did cause) an 

artificial price of those swaps. 

38. During the same short period of time in which Defendant manipulated the price of

MNGO on the Oracle Exchanges, the price of MNGO-USDC Swaps rose from approximately 

$0.04 to $0.54. Defendant’s manipulation of MNGO caused the value of his long MNGOUSDC Swaps to increase over ten-fold, from approximately $19 million to an artificial value of 

over $200 million. Defendant’s manipulation of MNGO also caused the value of his short 

MNGO-USDC Swaps to decline substantially, as Defendant expected, in his pursuit of a larger 

payday. Defendant needed to establish the short position to ensure that there was a counterparty 

to his long position to complete the swaps. The most he could lose in his short account was the 

$5 million he initially deposited, which was far less than the artificial appreciation of his swaps 

position in his long account and far less than the value of his ultimate prize: the over $100 

million in funds held by Mango Markets that he intended to steal. 

39. Immediately upon his long MNGO-USDC Swaps being valued by Mango 

Markets at a substantially inflated price, Defendant used the inflated value of the swaps as 

collateral to “borrow” $114 million from Mango Markets in the form of USDC, USDT, and 

various other digital assets, derived from deposits of other Mango Markets users, comprising all 

available lending liquidity on the platform. These liquidity-depleting actions were possible only 

because Eisenberg’s manipulation of MNGO and the MNGO-USDC Swaps deceived Mango 

Markets and market participants regarding the true value of his collateral. After withdrawing the 

digital assets, Defendant quickly moved his illicitly acquired funds to other platforms outside 

Mango Markets’s reach. 

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40. When Defendant withdrew these funds, he intentionally and misleadingly failed 

to disclose among other things, that (1) he had perpetrated a manipulative scheme to artificially 

inflate the value of his collateral, and (2) he intended to default on his obligation to deposit the 

appropriate amount of “borrowed” digital assets. 

41. After Eisenberg drained all liquidity from Mango Markets and ceased his 

manipulation of MNGO, the artificial prices created by Defendant deflated, and the price of 

MNGO quickly dropped to approximately $0.02 (which was below the pre-manipulation price of 

$0.04). The artificial price of the MNGO-USDC Swaps—the collateral securing the “borrowed” 

digital assets—correspondingly evaporated as well. 

42. Eisenberg’s spot purchases of MNGO on October 11, 2022 were extremely 

anomalous given the historical prices and trading volumes of MNGO, and his large matched 

MNGO-USDC Swap trades constituted manipulative wash trading. In addition, the immediate 

withdrawal of his unrealized gains in the form of other unmanipulated digital assets, including 

bitcoin, ether and Tether, signals that Eisenberg was aware that the market price of MNGO 

would rapidly collapse after his manipulative purchases ceased. 

43. On October 12, in an attempt to evade his liability and culpability, Defendant 

submitted a proposal to the Mango DAO offering to return a portion of his misappropriated 

assets (approximately $51 million at then-current market prices) if Mango Markets agreed, 

among other things, to “not pursue any criminal investigations or freezing of funds,” and to treat 

the remaining approximately $65 million as a “bug bounty” payment to Defendant. A “bug 

bounty,” as it is called in the decentralized finance platform environment, is a form of 

compensation that may be awarded for reporting software vulnerabilities. Mango Markets, like 

many other purported decentralized finance platforms, offered bug bounties, which were 

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discretionary and subject to a vote of the Mango DAO. Mango Markets published criteria for 

bug bounties, which stated that bounties would be equal to 10% of the amount that could have 

been stolen through the identified vulnerability, up to a maximum of $1 million. The criteria 

further stated that vulnerabilities that had already been exploited by the reporting person were 

ineligible for bug bounties. 

44. Shortly thereafter, Eisenberg submitted a revised governance proposal stipulating 

that he would return approximately $67 million of the stolen tokens, $47 million would be kept 

by him as a purported bug bounty, and Mango Markets would not pursue any criminal 

investigations or freezing of funds. The Mango DAO approved this proposal on October 13. 

Shortly thereafter, Eisenberg returned approximately $67 million to Mango Markets in the form 

of USDC and Solana (another digital asset). Thereafter, using $25 million from its own treasury 

in addition to the funds returned by Defendant, Mango Markets implemented a program to 

compensate Mango Markets users who were negatively impacted by Defendant’s scheme. 

D. Eisenberg Admits to His Scheme

45. Defendant maintained an account on Discord, a chatroom and messaging 

platform. On October 5, 2022, as reported by an independent journalist who claimed to have 

been in a private Discord chat with the Defendant, Eisenberg stated, “I’m investigating a 

platform that could maybe lead to a 9 figure payday. Should I do it.” Another participant on the 

server asked if Defendant’s scheme “is . . . just one of those oracle manipulatooor [sic] things to 

drain LPs [liquidity pools on digital asset exchanges].” Defendant responded: “Sorta. You take 

a long position. And then you make numba [sic] go up. And then you withdraw all protocol 

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TVL [total value locked2].” He further noted there was a risk because “there’s a bit unknown 

about how much hidden liquidity steps in,” meaning that his manipulation scheme would not 

work if MNGO was more liquid than he thought. The journalist posted screenshots of 

Defendant’s Discord statements online. Following Eisenberg’s theft from Mango Markets, he 

reportedly emailed the same independent journalist and noted that he had been “exploring a 

number of lending platforms with exposure to low-cap [i.e., market capitalization] coins.” 

Digital assets with low market capitalization are typically less liquid and more susceptible to 

manipulation. 

46. During the Relevant Period, Defendant maintained a Twitter account. On 

October 15, 2022, Defendant admitted his actions in a series of tweets (consolidated for ease of 

reading below), writing: 

I was involved with a team that operated a highly profitable trading 

strategy last week. I believe all of our actions were legal open market 

actions, using the protocol as designed, even if the development team did 

not fully anticipate all the consequences of setting parameters the way they 

are. Unfortunately, the exchange this took place on, Mango Markets, 

became insolvent as a result, with the insurance fund being insufficient to 

cover all liquidations. This led to other users being unable to access their 

funds. To remedy the situation, I helped negotiate a settlement agreement 

with the insurance fund with the goal of making all users whole as soon as 

possible as well as recapitalizing the exchange. This is similar to how auto 

deleveraging works on exchanges such as Binance and Bitmex, clawing 

back some profits from profitable traders in order to ensure all users [sic] 

funds are protected. As a result of this agreement, once the Mango team 

finishes processing, all users will be able to access their deposits in full with 

no loss of funds. 

47. Contrary to his purported belief that his actions were legal, in fact, they 

constituted blatant manipulation of spot prices and swaps. 

 

2 Total value locked (“TVL”) is the total amount of user funds invested a decentralized finance protocol. 

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V. VIOLATIONS OF THE COMMODITY EXCHANGE ACT AND REGULATIONS

Count I—Use of a Manipulative or Deceptive Device

Violations of Section 6(c)(1) of the Act, 7 U.S.C. § 9(1) (2018), and Regulation 180.1(a), 

17 C.F.R. § 180.1(a)(1)-(3) (2022) 

48. Paragraphs 1 through 47 are re-alleged and incorporated herein by reference. 

49. 7 U.S.C. § 9(1), makes it unlawful for any person, directly or indirectly, to: 

use or employ, or attempt to use or employ, in connection with any 

swap, or a contract of sale of any commodity in interstate commerce, 

or for future delivery on or subject to the rules of any registered 

entity, any manipulative or deceptive device or contrivance, in 

contravention of such rules and regulations as the Commission shall 

promulgate . . . . 

50. 17 C.F.R. § 180.1(a), provides: 

It shall be unlawful for any person, directly or indirectly, in 

connection with any swap, or contract of sale of any commodity in 

interstate commerce, or contract for future delivery on or subject to 

the rules of any registered entity, to intentionally or recklessly: (1) 

Use or employ, or attempt to use or employ, any manipulative 

device, scheme, or artifice to defraud; (2) make, or attempt to make, 

any untrue or misleading statement of a material fact or to omit to 

state a material fact necessary in order to make the statements made 

not untrue or misleading; [or] (3) engage, or attempt to engage, in 

any act, practice, or course of business, which operates or would

operate as a fraud or deceit upon any person. 

51. The MNGO-USDC Swaps meet the definition of “swaps” under 7 U.S.C. § 

1a(47) and 17 C.F.R. § 1.3 and, as such, are subject to the prohibitions of 7 U.S.C. § 9(1) and 17 

C.F.R. § 180.1(a)(1)-(3). 

52. During the Relevant Period, as described above, Defendant engaged in a scheme 

to manipulate the price of MNGO, manipulate the price of MNGO-USDC Swaps, and use the 

artificially inflated value of his MNGO-USDC Swaps as collateral to withdraw by means of 

interstate commerce, digital asset commodities, including bitcoin, ether and Tether, from Mango 

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Markets. By such conduct, Defendant misappropriated over $100 million worth of those 

commodities. 

53. By the foregoing conduct, Defendant directly or indirectly used or employed or 

attempted to use or employ a manipulative device, scheme, or artifice to defraud. 

54. By the foregoing conduct, Defendant made, or attempted to make, untrue or 

misleading statements of a material fact or omitted to state material facts necessary in order to 

make the statements made not untrue or misleading. 

55. Defendant engaged in the acts and practices described above intentionally or 

recklessly. 

56. By this conduct, Defendant violated 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-

(3). 

57. Each and every false or misleading statement and overt action in furtherance of 

the use or attempted use of a manipulative or deceptive device or contrivance is alleged herein as 

a separate and distinct violation of 7 U.S.C. § 9(1) and 17 C.F.R. § 180.1(a)(1)-(3). 

Count II—Manipulation and Attempted Manipulation of a Swap 

Violations of Section 6(c)(3) and 9(a)(2) of the Act, 7 U.S.C. §§ 9(3), 13(a)(2), and 

Regulation 180.2, 17 C.F.R. § 180.2 (2022) 

58. Paragraphs 1 through 57 are re-alleged and incorporated herein by reference

59. 7 U.S.C. § 9(3) makes it unlawful for any person, directly or indirectly, to 

“manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate 

commerce, or for future delivery on or subject to the rules of any registered entity.” 

60. 17 C.F.R. § 180.2 provides: “It shall be unlawful for any person, directly or 

indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in 

interstate commerce, or for future delivery on or subject to the rules of any registered entity.” 

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61. 7 U.S.C. § 13(a)(2) provides it shall be illegal to “manipulate or attempt to 

manipulate the price of any commodity in interstate commerce, or for future delivery on or 

subject to the rules of any registered entity, or of any swap.” 

62. The MNGO-USDC Swaps are “swaps” subject to the prohibitions of 7 U.S.C. §§ 

9(3) and 13(a)(2) and 17 C.F.R. § 180.2. 

63. By the foregoing conduct, through means of interstate commerce, Defendant 

manipulated or attempted to manipulate the price of MNGO-USDC Swaps in violation of 7 

U.S.C. §§ 9(3) and 13(a)(2), and 17 C.F.R. § 180.2. 

64. Each and every overt action in furtherance of the manipulation and attempted 

price manipulation is alleged herein as a separate and distinct violation of 7 U.S.C. §§ 9(3) and 

13(a)(2), and 17 C.F.R. § 180.2. 

VI. RELIEF REQUESTED

WHEREFORE, the Commission respectfully requests that the Court, as authorized by 

Section 6c of the Act, 7 U.S.C. § 13a-1, and pursuant to its own equitable powers, enter: 

A. An order finding that Defendant violated Sections 6(c)(1), 6(c)(3), and 9(a)(2) of 

the Act, 7 U.S.C. §§ 9(1), (3), 13(a)(2), and Regulations 180.1(a) and 180.2, 

17 C.F.R. §§ 180.1(a), 180.2 (2022); 

B. An order of permanent injunction enjoining Defendant and any other person or 

entity associated with him, including but not limited to affiliates, agents, servants, 

employees, assigns, attorneys, and all persons in active concert or participation 

with Defendant, including any successor thereof, from: 

i. Engaging, directly or indirectly, in conduct in violation of 

7 U.S.C. §§ 9(1), (3), 13(a)(2), and 17 C.F.R. §§ 180.1(a), 180.2; 

Case 1:23-cv-00173 Document 1 Filed 01/09/23 Page 17 of 21
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ii. Trading on or subject to the rules of any registered entity (as that term is 

defined in Section 1a(40) of the Act, 7 U.S.C. § 1a(40));

iii. Entering into any transactions involving “commodity interests” (as that 

term is defined in Regulation 1.3, 17 C.F.R. § 1.3 (2022)), or digital assets

that are commodities, as that term is described herein, for their own 

personal account(s) or for any account in which the Defendant has a direct 

or indirect interest; 

iv. Having any commodity interests or digital assets that are commodities, as 

that term is described herein, traded on the Defendant’s behalf; 

v. Controlling or directing the trading for or on behalf of any other person or 

entity, whether by power of attorney or otherwise, in any account 

involving commodity interests or digital assets that are commodities, as 

that term is described herein; 

vi. Soliciting, receiving, or accepting any funds from any person for the 

purpose of purchasing or selling any commodity interest or digital assets 

that are commodities, as that term is described herein; 

vii. Applying for registration or claiming exemption from registration with the 

Commission in any capacity, and engaging in any activity requiring such 

registration or exemption from registration with the Commission, except 

as provided for in Regulation 4.14(a)(9), 17 C.F.R. § 4.14(a)(9) (2022); 

and/or 

viii. Acting as a principal (as that term is defined in Regulation 3.1(a), 

17 C.F.R. § 3.1(a) (2022)), agent, or any other officer or employee of any 

Case 1:23-cv-00173 Document 1 Filed 01/09/23 Page 18 of 21
19 

person (as that term is defined in 7 U.S.C. § 1a(38), registered, exempted 

from registration, or required to be registered with the Commission except 

as provided for in 17 C.F.R. § 4.14(a)(9)); 

C. An order requiring Defendant to pay a civil monetary penalty of not more than the 

civil monetary penalty prescribed by Section 6c(d)(1) of the Act, 7 U.S.C. § 13a1(d)(1), as adjusted for inflation pursuant to the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 2015, Pub. L. 114–74, 129 Stat. 584, title 

VII, Section 701, see Commission Regulation 143.8, 17 C.F.R. § 143.8 (2022), 

for each violation of the Act or Regulations, plus post-judgment interest; 

D. An order directing Defendant, as well as any successors thereof, to disgorge, 

pursuant to such procedure as the Court may order, all benefits received 

including, but not limited to, trading profits, revenues, salaries, commissions, 

fees, or loans derived directly or indirectly from acts or practices which constitute 

violations of the Act and Regulations, as described herein, and pre- and postjudgment interest thereon from the date of such violations; 

E. An order directing Defendant, as well as any successors thereof, to make full 

restitution, pursuant to such procedure as the Court may order, to every customer 

and investor whose funds Defendant received, or caused another person or entity 

to receive, as a result of the acts and practices constituting violations of the Act 

and Regulations, as described herein, and pre- and post-judgment interest thereon 

from the date of such violations; 

F. An order directing Defendant, as well as any successors thereof, to rescind, 

pursuant to such procedure as the Court may order, all contracts and agreements, 

Case 1:23-cv-00173 Document 1 Filed 01/09/23 Page 19 of 21
20 

whether express or implied, entered into between, with, or among Defendant and 

any customer or investor whose funds were received by the Defendant as a result 

of the acts and practices which constituted violations of the Act and the 

Regulations, as described herein;

G. An order directing that Defendant, and any successors thereof, make an 

accounting to the Court of all of their assets and liabilities, together with all funds 

they received from and paid to investors and other persons in connection with 

commodity transactions and all disbursements for any purpose whatsoever of 

funds received from commodity transactions, including salaries, commissions, 

interest, fees, loans, and other disbursement of money or property of any kind 

from at least the beginning of the Relevant Period to the date of such accounting; 

H. An order requiring Defendant and any successors thereof to pay costs and fees as 

permitted by 28 U.S.C. §§ 1920 and 2412(a)(2); and 

I. An order providing such other and further relief as the Court deems proper. 

* * * 

Case 1:23-cv-00173 Document 1 Filed 01/09/23 Page 20 of 21
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VII. DEMAND FOR JURY TRIAL

Plaintiff hereby demands a jury trial.

Dated: January 9, 2023 

COMMODITY FUTURES TRADING

 COMMISSION

By: /s/ John C. Murphy 

John C. Murphy 

Jacob Mermelstein

Trial Attorneys 

jmurphy@cftc.gov

jmermelstein@cftc.gov 

Phone: (646) 746-9700 

K. Brent Tomer 

Chief Trial Attorney

ktomer@cftc.gov 

Phone: (646) 746-9700 

Manal M. Sultan

Deputy Director 

msultan@cftc.gov 

Phone: (646) 746-9700 

Commodity Futures Trading Commission 

Division of Enforcement 

290 Broadway, 6th Floor

New York, NY 10007 

Phone: (646) 746-9700 

Fax: (646) 746-9940 

ATTORNEYS FOR PLAINTIFF

COMMODITY FUTURES TRADING

COMMISSION 

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