A US federal decide has vacated key fraud and manipulation convictions towards Avraham Eisenberg, the dealer on the middle of the case involving a $110 million exploit of the decentralized change Mango Markets.
On Friday, US District Choose Arun Subramanian dominated that the proof offered at trial didn’t assist the jury’s conclusion that Eisenberg made materially false representations to Mango Markets.
The choice vacates Eisenberg’s convictions for commodities fraud and market manipulation and acquits him of a 3rd cost, considerably weakening the federal government’s case.
Eisenberg, a self-proclaimed “utilized sport theorist,” was convicted in 2024 for artificially inflating the value of Mango’s MNGO token by over 1,300% in a matter of minutes and utilizing the ensuing positive factors as collateral to withdraw $110 million in crypto belongings from the platform.
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Choose sides with Eisenberg
The Justice Division argued that he deceived Mango’s good contract-based lending system, however Eisenberg’s protection maintained that he merely exploited poorly designed, permissionless code — with out making any false representations.
Choose Subramanian agreed, writing that “Mango Markets was permissionless and automated,” that means the system couldn’t be deceived in a authorized sense. “There was inadequate proof of falsity,” the decide added, siding with Eisenberg’s interpretation of DeFi mechanics.
The decide additionally rejected prosecutors’ argument that the case ought to be heard in New York. Eisenberg was in Puerto Rico on the time of the trades, and the courtroom discovered that no significant exercise tied to the alleged crime occurred in New York.
The DOJ had cited a Poughkeepsie-based Mango person and a third-party vendor in Manhattan, however the decide dominated these weren’t sufficient to ascertain correct venue.
The US authorities should now resolve whether or not to refile the vacated fees, although the Trump administration has just lately signaled a lowered give attention to crypto enforcement. Eisenberg nonetheless faces civil fits from each the SEC and CFTC.
Whereas this ruling clears Eisenberg within the Mango Markets case, he stays behind bars.
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Eisenberg charged with youngster pornography
In a separate case, Eisenberg was sentenced to almost 4 years in jail on Could 1 after pleading responsible to possessing youngster pornography — a cost stemming from unrelated proof uncovered throughout his arrest.
In December 2022, US federal regulation enforcement authorities arrested Eisenberg in Puerto Rico. FBI officers charged the hacker with one depend of commodities fraud and one depend of commodities manipulation.
A jury discovered Eisenberg responsible of wire fraud, commodities fraud, and commodities manipulation in April 2024. The protection argued that the exploit was not a cybercrime and represented a “profitable and authorized buying and selling technique.”
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