Mango Markets exploiter seeks to keep disputed funds paid as ‘bug bounty’

Attorneys representing Avraham Eisenberg argued he had already settled his dispute with Mango DAO and shouldn’t have to pay back any more funds.

The alleged exploiter of the decentralized finance (DeFi) protocol Mango Markets, Avraham Eisenberg, is seeking to keep his share of crypto gained from his so-called “highly profitable trading strategy.”

On Feb. 15 attorneys for Eisenberg filed an opposition in a New York District Court to a lawsuit from Mango that asked for $47 million in damages plus interest starting from the time of Eisenberg’s October 2022 attack that drained around $117 million from the protocol.

The lawyers argued that Eisenberg shouldn’t need to pay back any more funds to the DeFi platform due to a settlement agreement he reached with Mango DAO, arguing that the “matter was settled.”

A governance proposal was passed by the Mango DAO following the draining of its treasury that saw Eisenberg keep a portion ($47 million) of the pilfered funds as a bug bounty along with a stipulation that Mango wouldn’t pursue legal action.

“Eisenberg transferred funds totaling approximately $67 million to Mango Markets,” the attorneys wrote, adding:

“Weeks later, eligible Mango Markets’ members received reimbursement from the Mango Markets treasury. At that point, all involved considered this matter closed and Mr. Eisenberg heard nothing further from Mango Markets.”

Mango however, said in its suit that the settlement should be voided as it was made “under duress” and alleged Eisenberg “was not engaged in lawful bargaining.”

Eisenberg’s attorneys rebuffed these claims saying the “improper three-month delay” for Mango filing its suit “undermines any alleged irreparable harm” and was to “take advantage” of Eisenberg’s December 2022 arrest in Puerto Rico by United States authorities.

Related: Alleged Mango Markets exploiter waives bail during hearing in federal court

Eisenberg was charged by the Federal Bureau of Investigation (FBI) with commodities fraud and manipulation.

He also faces a lawsuit from the U.S. Commodity Futures Trading Commission (CFTC) that alleges market manipulation and a suit from the Securities and Exchange Commission (SEC) for violating securities laws relating to anti-fraud and market manipulation.

Eisenberg has previously stated his trades on Mango were “legal open market actions, using the protocol as designed” and called his purported attack a “highly profitable trading strategy.”