This Week on Crypto Twitter: $100 Million Mango Markets Saga, Caitlin Long Calls Out the Fed

by Arthur · October 16, 2022

This Week on Crypto Twitter: 0 Million Mango Markets Saga, Caitlin Long Calls Out the Fed

this week on crypto twitter — Illustration by Mitchell Preffer for Decrypt

Although the markets are offered little to write home about, crypto Twitter was a veritable hive of hot-takes, revelations and anxiety-inducing hack news this week. There were also rumors that someone had committed an “improper” with one of our bovine friends.

But the undoubted talk of the week centered on the current hacking epidemic, which really has been rising during the last few years.

Table of Contents

Hack week.

We’re only sixteen days into it, and October has already been a particularly bad month for crypto hacks, in what’s turning out to be the worst year for hacking ever. In fact, this week was the worst of all, with four massive hacks in a single day on Tuesday. Cryptoanalysis company Chainalysis wrote a thread about the criminal hackathon that 2022 has been.

1/ After four hacks yesterday, October is now the biggest month of the biggest year ever for hacking activity, with more than half the month to go. So far this month, 718 million dollars have been stolen from #DeFi protocols across 11 different hacks. pic.twitter.com/emz36f6gpK

— Chain Analysis (@chainanalysis) 12 October 2022

Of the four hacks, Solana-based crypto trading platform Mango Markets was hit by the biggest. It was tapped for $100 million. When he first heard about it, blockchain spec ZachXBT ran his fist through the computer at his kid’s birthday party and made everything difficult.

Just smashed my screen in front of 22 guests at my son’s birthday party because of a Solana block explorer. My wife just took our crying children and said they are all spending the week at her mother’s house. This crypto crap has ruined my marriage. I can’t take this anymore. Good bye.

— ZachXBT (@zachxbt) 11 October 2022

The Mango Markets exploit was also the most intriguing, as the hackers appeared to be working in the interests of Mango’s depositors. In their proposal, they cited “bad debt” from a bailout carried out by Mango Markets and Solend back in June.

Very interesting suggestion from the Mango user.

They propose to make depositors whole by using the entire $70 million insurance fund + returning 750,000 SOL and 800,000 mSOL, in exchange for immunity. It covers all deposits.

This pits the Mango team against the depositors.

— defi guy (@0xShitTrader) 12 October 2022

Elrond Network researcher Alex Valaitis had a popular answer.

So just to recap @mangomarkets situation:

-Hackers exploit Mango for $100M+

-Hacker turns around and offers to return most of the funds if DAO promises not to pursue criminal investigations

-Hackers use 32 million votes from the exploit to vote “Yes”

LMFAO you can’t make this up! pic.twitter.com/LsdafMS7vQ

— Alex Valaitis (@alex_valaitis) 12 October 2022

The hackers didn’t seem to have covered their tracks very well. An attacker was doxxed by SolScan.

Eventually, “Eisenberg” came clean. It turns out that he is Avraham Mayer Eisenberg from New York, and he allegedly did milked millions from crypto exploits before. Eisenberg confirmed that for his latest exploit, he was working as part of a larger organization and claimed their actions were legal.

I believe that all our actions were legal actions in the open market, using the protocol as designed, even if the development team did not fully foresee all the consequences of setting parameters as they are.

— Avraham Eisenberg (@avi_eisen) 15 October 2022

He also returned more than half of the loot.

$67 million in various crypto assets have been returned to the DAO. Let’s meet on Monday 15:00 UTC about the Mango dispute to discuss how we can sort out this mess.

— Mango (@mangomarkets) 15 October 2022

And speaking of cybercrime, this certainly does not bode well…

In other news

Crypto enthusiast/investor Charles Trussel shared a screenshot on Monday ranking the multi-millionaires who lost the most from crypto lender Celsius’ high profile ongoing liquidity crisis. Threat himself must have lost 5 million dollars.

On Monday, Bitcoin’s mining difficulty hit a new all-time high after rising 14% – the biggest increase since May. As the difficulty increases, miners may see slimmer profits if Bitcoin’s price remains inert, since more computing power and electricity are needed to mine. However, increases in mining difficulty also indicate a strong and growing network.

Will Clemente of crypto research and trading platform Reflexive Research said that if the current Bitcoin mining climate is anything to go by, only the fittest will survive.

Bitcoin just experienced a huge difficulty adjustment, the biggest in over a year.

This reflects how aggressively new rigs have come online and the competition is increasing. Only the most efficient miners will survive these low BTC prices, high energy prices and high difficulty conditions. pic.twitter.com/nzp0XeVT8K

— Will Clemente (@WClementeIII) 10 October 2022

At an Ethereum Foundation developer conference on Tuesday, one of the attendees’ vocal harassment went unnoticed by the team. Tweeter Daphne later wrote a fuller account of the incident on her blog/newsletter and the accused participant also posted his version of events.

Day 1 of @EFDevcon and a group of us women were harassed by a nasty guy! What did the Ethereum Foundation team do? Smiled and chatted with him for 10 minutes and let him go his way! I feel terribly unsafe at this event. 👎 Take women seriously when they report harassment. pic.twitter.com/DtW9fqZLkK

— daphne.lens 🦋 writes… (@daphachar) 11 October 2022

Caitlin Long, founder and CEO of up-and-coming crypto bank Custodia, has been waiting for the Fed for over two years to approve the bank’s application for a main account. On Wednesday, she called out the US Federal Reserve for hypocrisy after Fed-approved investment banking giant BNY Mellon began holding Bitcoin for select firms on Tuesday. Video footage of Long’s response was shared widely.

Finally: