- A U.S. judge overturned the fraud and market manipulation convictions of Avraham Eisenberg, who was accused of taking $110 million from Mango Markets.
- The court decided prosecutors did not show Eisenberg made false statements to the decentralized finance platform.
- Eisenberg’s defense argued he exploited a loophole in Mango Markets’ smart contracts, not through deception.
- The judge stated Mango Markets’ open, permissionless system allowed anyone to transact, so there was not enough evidence of fraud.
- Although Eisenberg avoided these charges, he remains in prison for a separate child sexual abuse material conviction.
U.S. District Judge Arun Subramanian has overturned the wire fraud and market manipulation convictions of Avraham Eisenberg, who was accused of extracting $110 million from the now-closed decentralized finance protocol, Mango Markets. The ruling came on Friday after the court found that the prosecution did not prove Eisenberg made false representations on the platform.
According to court records, Eisenberg carried out a series of massive trades that rapidly drove the price of Mango Markets’ token, MNGO, up by over 1,000% within 20 minutes. He then used the artificially inflated token as collateral to borrow and withdraw $110 million in different cryptocurrencies. Prosecutors argued this was fraudulent, but the judge disagreed.
Eisenberg’s legal team maintained that Mango Markets’ operation through smart contracts—a set of self-executing digital agreements—meant anyone could transact on the platform without restrictions. The defense stated that Eisenberg simply took advantage of a vulnerability, not by submitting false information. The judge agreed, writing that Mango’s open structure meant there was “insufficient evidence of falsity” as alleged by prosecutors.
Eisenberg was arrested in December 2022. While the fraud and market manipulation case has now been dismissed, he is still serving a four-year sentence for admitting to possession of child sexual abuse material.
“From the beginning, we said this case was fatally flawed,” said his attorney, Brian Klein of Waymaker LLP. “We are very pleased for Avi that the judge granted our motion and dismissed the case.” For more information on the background of this case, see official court documents and previous coverage.
Mango Markets has remained inactive since the incident, and the verdict underlines the legal uncertainty around code-based, permissionless platforms in decentralized finance.
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