Crypto currencies are a relatively new area, and we continuously see news about various first-time occurrences. And if it’s the first time we see someone getting punished for indirectly hacking a DeFi protocol, that decision came out recently.
Mango Protocol Case
On October 11, 2022, Mango Markets was hacked, resulting in a loss of $114 million. Avraham Eisenberg was convicted of the crime at today’s hearing. Although lawyers requested more time citing the complex DeFi and crypto structure, Avraham was definitively found guilty.
Solana-based decentralized crypto currency exchange Mango Markets was exploited due to a trading error, draining the liquidity pool. The attacker was on trial for commodity manipulation and phone fraud. What made the case interesting was that it revolved around the exploitation of a technical error rather than a hack due to a system vulnerability.
This verdict sets a precedent for those who use system errors for profit, including those who trigger price slippages by draining liquidity pools. Those attempting to benefit from algorithm errors and other market issues will now think twice.
