• Avraham Eisenberg, a crypto trader, lost his gamble when he was sued by Mango Labs for $47 million.
• The case is a study of how ideals of crypto governance can be trumped by real-world contracts law.
• Eisenberg had negotiated a settlement with Mango Markets’ decentralized autonomous organization (DAO) that he thought exempted him from civil liability, but now Mango Markets are demanding he pay back the DAO.

Avraham Eisenberg, a crypto trader, was recently hit with a $47 million civil suit from Mango Labs for his role in the destructive exploit of Mango Markets. The case is one of how the ideals of crypto governance can be trumped by real-world contracts law.

In October 2020, Eisenberg had negotiated a settlement with Mango Markets’ decentralized autonomous organization (DAO) that he thought exempted him from civil liability. He had used “the protocol as designed” and wanted to protect himself in case his victims felt otherwise, so he negotiated with them to make sure they would not sue.

Unfortunately, despite his best efforts, Mango Markets representatives now say the DAO’s own deal should be thrown out for effectively violating contracts law. They are demanding Eisenberg pay back the DAO for his role in the exploit. This is a prime example of how powerless crypto governance is when faced with the conventional legal system.

Mango Markets was a popular platform for trading crypto tokens and derivatives on the Solana blockchain. MNGO holders controlled the governance of the platform, and they were the ones who approved the settlement that Eisenberg thought would protect him.

Unfortunately, the US courts disagreed with the settlement and have now demanded Eisenberg pay back the $47 million he was accused of stealing. This case has highlighted how crypto governance and contracts law can conflict, and it serves as a warning to all crypto traders and investors to be aware of the potential legal risks of their activities.

The case of Avraham Eisenberg is a cautionary tale for all those involved in the crypto space. It is a reminder of the importance of understanding the legal implications of any actions taken, and of being aware of the limitations of crypto governance when dealing with real-world contracts law.