A recent ruling by a US federal judge has overturned key fraud and manipulation convictions against Avraham Eisenberg, the trader at the center of a case involving a $110 million exploit of the decentralized exchange Mango Markets. The decision, made by US District Judge Arun Subramanian, highlighted that the evidence presented at trial did not fully support the jury's conclusion that Eisenberg had made materially false representations to Mango Markets.

The ruling vacated Eisenberg’s convictions for commodities fraud and market manipulation and acquitted him of a third charge, significantly weakening the government’s case against him. Eisenberg, who describes himself as an "applied game theorist," was initially convicted in 2024 for artificially inflating the price of Mango's MNGO token by over 1,300% in a short period and using the gains to withdraw $110 million in crypto assets from the platform.

The Justice Department had argued that Eisenberg deceived Mango's smart contract-based lending system. However, Eisenberg's defense team maintained that he had simply exploited poorly designed, permissionless code without making any false representations. Judge Subramanian sided with Eisenberg, stating that Mango Markets operated on a permissionless and automatic system, making it impossible to deceive the system in a legal sense. The judge concluded that there was insufficient evidence of falsity, supporting Eisenberg's understanding of DeFi mechanics.

Moreover, the judge rejected the prosecutors’ argument that the case should be heard in New York, as Eisenberg was in Puerto Rico during the trades, and the court found no substantial connection to New York. The ruling raised questions about whether the US government would refile the vacated charges, especially since the Trump administration had indicated a reduced focus on crypto enforcement. Despite the ruling in his favor, Eisenberg still faces civil suits from both the SEC and CFTC.

While the recent ruling clears Eisenberg of the charges related to the Mango Markets case, he remains incarcerated. In a separate case, Eisenberg was sentenced to nearly four years in prison on May 1 after pleading guilty to possessing child pornography, a charge stemming from unrelated evidence discovered during his arrest in December 2022.

Overall, the case involving Avraham Eisenberg sheds light on the complexities of legal interpretations within the crypto space, particularly in decentralized finance. The judge's decision to vacate the convictions underscores the evolving landscape of regulatory oversight and enforcement in the crypto industry.

Source: https://cointelegraph.com/news/judge-overturns-avraham-eisenberg-fraud-convictions-mango-markets?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound