Mango Labs’ $47 million civil suit against crypto trader Avraham Eisenberg isn’t just the latest legal drama to emerge from the destructive exploit of Mango Markets. It’s also a case study in how the ideals of crypto governance take a back seat to real-world contracts law.
Eisenberg, who faces criminal charges over the $114 million escapade, had in October negotiated a settlement with Mango Markets’ decentralized autonomous organization (DAO) that he thought exempted him from civil liability. To him, his trades were legal and used “the protocol as designed.” But, just in case his victims felt otherwise, he negotiated with them to make sure they would not sue.
Representatives for Mango Markets now say the DAO’s own deal should be thrown out for effectively violating contracts law; they’re demanding Eisenberg pay back the DAO. In doing so, Mango Markets may unwittingly highlight how powerless crypto governance is when grappling with the conventional legal system.
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