Judge Dismisses Convictions of Fraud in Mango Markets Exploit Case
A US federal judge has dismissed some of the most notable fraud and manipulation convictions on Avraham Eisenberg, who is the mastermind behind the $110 million Mango Markets exploit, a DeFi exchange.
Court Determines There Was No Misrepresentation of DeFi Protocol Use
US District Court Judge Arun Subramanian ruled on Friday that prosecutors failed to prove that Eisenberg made materially false statements to Mango Markets. The permissionless, smart contract-driven character of the platform, the judge stated, isn’t subject to representations like antiquated systems.
This historic ruling reverses Eisenberg’s convictions on charges of commodities manipulation and commodity fraud in 2024. The court also acquitted him on one associated wire fraud charge, a crucial legal precedent for the treatment of activity in DeFi platforms by courts.
Eisenberg Defended His Tactic As Legal
Eisenberg, who described himself as an “applied game theorist,” was already found guilty of manipulating the platform’s MNGO token by artificially inflating its value by more than 1,300% and withdrawing cash against that collateral.
The Justice Department contended he manipulated the code of the protocol, but his defense claimed he used available-to-the-public techniques and followed a legitimate — even aggressive — strategy for trading.
Though Eisenberg’s DeFi-related convictions have been overturned, he is still convicted in the other criminal case. He was sentenced to almost four years in jail on May 1, 2025, after pleading guilty to the possession of child pornography. The offense arose from unrelated material discovered upon his arrest in Puerto Rico in December 2022.
In spite of the overturning of his convictions related to DeFi, the sentence in the other case guarantees that Eisenberg is still incarcerated.
