Judge Reverses Convictions in Crypto Fraud Case Involving Mango Markets Exploiter

A judge in the United States has nullified the fraud and market manipulation convictions against Avraham Eisenberg, a crypto trader who reportedly siphoned off $110 million from the now-defunct Mango Markets decentralized finance protocol.

On Friday, U.S. District Judge Arun Subramanian determined that the prosecution failed to establish that Eisenberg engaged in deceptive practices on the platform.

Additionally, the judge dismissed the wire fraud charges against Eisenberg. He had inflated the price of Mango’s native token, MNGO, through significant trades, spiking its value by over 1,000% within a mere 20 minutes, subsequently enabling him to borrow and withdraw $110 million in different cryptocurrencies, using the inflated collateral.

Eisenberg’s legal team contended that the protocol, which functioned via smart contracts, permitted everyone to conduct transactions freely, and he merely took advantage of a flaw. The judge affirmed this perspective, noting that the open-access model of Mango created an environment where the prosecution’s claims of deception lacked sufficient supporting evidence.

After being arrested in December 2022, Eisenberg saw this case dismissed, though he is currently serving a four-year sentence due to a conviction related to the possession of child sexual abuse material.

“Our position from the start has been that the case was fundamentally flawed,” remarked his attorney, Brian Klein from Waymaker LLP. “We are very gratified that the judge agreed to our motion and has dismissed the case.”