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SEC Sues Eisenberg for Draining Mango Markets, Alleges MNGO a Security
It’s the latest case to emerge from Avraham Eisenberg’s “highly profitable trading strategy.”

The U.S. Securities and Exchange Commission on Friday charged decentralized finance (DeFi) trader Avraham Eisenberg over his draining of $116 million from Solana-based decentralized exchange Mango Markets. But this action could have a wider effect.
The SEC’s charges rest on the agency’s assertion that MNGO, Mango Markets’ governance token, is a security, much like its arguments in previous actions that have put the crypto industry on its guard.
Eisenberg, 27, already faced criminal commodities fraud charges for his admitted role in orchestrating the “highly profitable trading strategy” against Mango Markets in October.
Apart from his actions, the SEC complaint detailed the Howey Test standards the agency used to call MNGO a security, much as the agency has done in previous enforcement actions – most notably the former Coinbase (COIN) manager's insider-trading case where the SEC declared nine tokens as unregistered securities without directly accusing the token issuers or Coinbase of anything. As in that case, the Mango action doesn't go after Mango Markets, the exchange.
A Mango co-founder didn't immediately respond to a request for comment.
The SEC's backdoor listings of which tokens it considers securities have sent shudders through the law firms that represent crypto clients.
In this case, the agency said that despite MNGO’s labeling as a “governance token,” it “was purchased and sold as a crypto asset security.” Its holders had expectations of profit and “entered into a common enterprise” – two of the factors the SEC looks for in identifying investment contracts that fall under securities laws. And holders of MNGO can use their tokens to vote in decisions governing Mango Markets’ operations, the agency said.
SEC Chairman Gary Gensler and his enforcement officials have recently been amplifying their warnings that the regulator is losing patience with unregistered securities and the unregistered exchanges where they trade.
The Commodity Futures Trading Commission already hit Eisenberg last week with accusations he’d manipulated the market.
UPDATE (Jan. 20, 2023, 20:28 UTC): Adds detail on SEC accusations.
Danny Nelson
Danny is CoinDesk's managing editor for Data & Tokens. He formerly ran investigations for the Tufts Daily. At CoinDesk, his beats include (but are not limited to): federal policy, regulation, securities law, exchanges, the Solana ecosystem, smart money doing dumb things, dumb money doing smart things and tungsten cubes. He owns BTC, ETH and SOL tokens, as well as the LinksDAO NFT.

Jesse Hamilton
Jesse Hamilton is CoinDesk's deputy managing editor on the Global Policy and Regulation team, based in Washington, D.C. Before joining CoinDesk in 2022, he worked for more than a decade covering Wall Street regulation at Bloomberg News and Businessweek, writing about the early whisperings among federal agencies trying to decide what to do about crypto. He’s won several national honors in his reporting career, including from his time as a war correspondent in Iraq and as a police reporter for newspapers. Jesse is a graduate of Western Washington University, where he studied journalism and history. He has no crypto holdings.
