- On-chain data indicates that the trader behind the Mango Market hack, Avraham Eisenberg, recently borrowed 40 million curve tokens from the decentralized loan platform Aave.
- The dramatic event seems to be a part of a strategy to sell off tokens and reduce the value of CRV.
- A few weeks ago, Eisenberg made a plan to change the lending rules at Ave public.
An infamous cryptocurrency trader who boasted last month about making off with more than $100 million in a contentious price manipulation scheme appears to have lost millions on a similar exploit attempt that failed early Tuesday.
According to on-chain data, Avraham Eisenberg, the trader responsible for the Mango Market hack in October, recently borrowed 40 million curves (CRV) tokens through the decentralized lending site Aave. The dramatic action appears to be part of a plan to sell off the tokens, drive down the value of CRV as a result, and profit handsomely from millions of short bets on the token, leaving Aave with a mountain of bad debt.
However, the scheme did not work out as expected. Early on Tuesday, CRV’s price dropped from $0.53 to $0.41, but it rapidly recovered and soared as high as $0.71. As of this writing, statistics from CoinGecko show that CRV has increased by 31% over the previous day to $0.67.
Eisenberg publicly described a strategy to influence Aave’s lending regulations weeks ago, which would have potentially made it possible for the trader’s Tuesday plot to be successful.
I’ve been advised aave is perfectly safe so here’s the potential trading strategy. Not financial or legal advice, but if you do make 9 figures on this feel free to send a tip
Note that starting with more initial capital increases success odds and profit percentage pic.twitter.com/HKAF7Y5ogM
— Avraham Eisenberg (@avi_eisen) October 19, 2022
However, neither Aave nor Gauntlet—the financial modeling software used by Aave—moved to take any preventative measures in the weeks that followed it to stop an exploit as the one Eisenberg described.
Gauntlet tweeted, “The attempt to squeeze CRV on Aave has been futile and unprofitable. Aave has accumulated a significantly smaller insolvent position despite this.
The attempt to squeeze CRV on @AaveAave has been unsuccessful and unprofitable. Despite this Aave has accrued a much smaller insolvent position
Our immediate recommendation is to freeze a number of tail assets on v2 to mitigate the risks of similar, likely unprofitable, squeezes
— Gauntlet (@gauntletnetwork) November 22, 2022
Earlier this month, hackers used weaknesses in the smart contract technology to modify Mango’s native coin, MNGO. As there was no centralized organization, Tarbell claims that exploiters seized the chance.
Co-founder of the cybersecurity investigative company Naxo Tarbell stated that Mango’s situation is special because an alleged criminal would be arrested in regulated marketplaces. Avraham Eisenberg, one of the admitted exploiters, confirmed he will repay $67 million of the stolen money in a tweet before calling the exploit a “high-profit trading approach.”