A US federal judge has overturned key fraud and market manipulation convictions against Avraham Eisenberg in the Mango Markets case. The decision marks a turning point in the $110 million exploit involving the decentralized trading platform.
Judge Overturns Fraud Charges in Mango Markets Case
US District Judge Arun Subramanian ruled that the evidence presented in Eisenberg’s trial was not enough to support the jury’s decision. Eisenberg had been previously convicted of commodities fraud, market manipulation, and another charge tied to his involvement in Mango Markets.
According to court documents, the judge found that Mango Markets operated on a decentralized and permissionless system. This lack of centralized control and the platform’s automated design meant the prosecution could not prove Eisenberg made any false representations. Subramanian stated, “Mango Markets was permissionless and automatic… There was insufficient evidence of falsity.”
The decision to set aside the convictions follows Eisenberg’s arrest in 2022 for orchestrating a price manipulation scheme that caused Mango’s MNGO token to rise over 1,300% within minutes. He then used the inflated value as collateral to withdraw $110 million in crypto assets.
Eisenberg Still Faces Civil Cases From SEC and CFTC
Following the good news from courts, Eisenberg is being sued by both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). They believe violations of securities and commodities laws were made due to the same Mango Markets incident.
Eisenberg allegedly took steps to mislead the price feeds and lending systems on the platform, according to the CFTC. The SEC claims he broke antifraud laws under the federal securities laws by setting up a fraudulent scheme. The agencies are asking for penalties, restrictions called injunctions, and return of the gains made illegally.
Eisenberg’s lawyers claim that his actions followed the rules of a permissionless system and did not involve dishonesty. Regulatory institutions still believe that using the weaknesses in protocols is considered fraud under US laws.
Judge Rejects Venue Argument in Mango Markets Fraud Case
Prosecutors attempted to hold the trial in New York, but Judge Subramanian rejected the venue, citing no direct ties to the alleged crime in that state. This added to the rationale for overturning the convictions.
Court filings show the transactions related to the Mango exploit occurred on-chain and without any physical location. Since Eisenberg operated from outside New York and used decentralized tools, the court concluded the venue was inappropriate for the fraud charges.
This ruling could influence future crypto-related prosecutions, particularly those involving decentralized finance platforms. It also raises questions about jurisdiction in digital asset cases.
Separate Criminal Conviction for Unrelated Offense
Even with the charges against him at Mango Markets dropped, Eisenberg is still convicted of other crimes. He has been sentenced to four years in prison after being found in possession of CSAM.
There were more than 1,200 illegal documents on Eisenberg’s computer when he was taken into custody for the Mango case. His crime of child sexual abuse does not connect to his cryptocurrency matters despite this, it could affect the outcome of his current lawsuits.
The US government has not said whether it plans to refile the previous charges. Experts say that upcoming cases could shift toward centralized platforms and an easier-to-see intention of wrongdoing.
