An alleged fraudster wreaked havoc on a decentralized asset exchange called Mango Markets according to the latest enforcement action by the Commodity Futures and Trading Commission (CFTC).
In a statement last night, the regulatory agency announced the action against a trader, Avraham Eisenberg:
“This is the CFTC’s first enforcement action for a fraudulent or manipulative scheme involving trading on a supposed decentralized digital asset platform, and its first involving a scheme that is sometimes called ‘oracle manipulation.'”
Regarding “oracle manipulation,” the accused used a data stream (oracle) connected to the price of the Mango token to favorably affect the price of whatever he was trading – in this case, a derivative known as a swap.
The fraud outlined by the CFTC amounts to a classic “pump and dump” where the price goes up just long enough to let the pumper sell his shares, tokens and/or derivatives (this case).
In the space of 30 minutes last October, Mr. Eisenberg reportedly got away with $47 million in digital assets from the Mango Markets platform says the agency.
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