Judge Overturns Key Convictions in $110M Mango Markets Crypto Case

Key Takeaways:

• A federal judge overturned Avraham Eisenberg’s fraud and manipulation convictions in the $110M Mango Markets case.
• The court accepted Eisenberg’s defense that he used flawed but legal smart contract mechanics rather than committing fraud.
• Despite the ruling, Eisenberg remains in prison on child pornography charges.

A US federal judge has thrown out major convictions against Avraham Eisenberg, the man accused of exploiting decentralized exchange Mango Markets for $110 million.

On Friday, Judge Arun Subramanian vacated Eisenberg’s convictions for commodities fraud and market manipulation, stating that prosecutors failed to prove he made materially false representations.

The court also acquitted Eisenberg of a third charge, leaving the government’s case significantly weakened.

Eisenberg had been found guilty in April 2024 after a jury concluded he manipulated Mango’s MNGO token price by over 1,300% within minutes.

He then used the inflated value as collateral to drain the protocol of $110 million in crypto.

While the Department of Justice framed the act as a calculated deception of a smart contract system, Eisenberg’s defense insisted he simply took advantage of flawed but open code — without lying or misleading the protocol.

Judge Subramanian sided with this view, noting that the platform was “permissionless and automatic,” making it difficult to establish a legal basis for fraud. “There was insufficient evidence of falsity,” he wrote.

Everything we've been told about "Code is Law" defense not standing a chance in court has been a lie. Mango Markets / Avi Eisenberg charges just been dropped by a federal charge.

The same logic used to dismiss the case can be used for pretty much any permissionless DeFi… pic.twitter.com/yWIUnmAUxX

The ruling also rejected New York as the proper venue for the trial.

Eisenberg was based in Puerto Rico during the trades, and the judge dismissed the DOJ’s attempts to tie the case to the state through a Mango user in Poughkeepsie and a third-party service provider in Manhattan.

The vacated charges now leave the Justice Department to decide whether to pursue the case again.

However, recent signals from the Trump administration suggest a cooling stance on crypto-related enforcement.

Despite the court win, Eisenberg remains in federal custody. Earlier this month, he was sentenced to nearly four years in prison on an unrelated charge of child pornography possession, based on evidence found during his 2022 arrest in Puerto Rico.

Eisenberg still faces separate civil cases brought by the SEC and CFTC.

On October 11, 2022, Mango Markets was the victim of an attack in which approximately $110 million was drained from its treasury.

Shortly after the attack, Avraham Eisenberg came forward as the perpetrator, asserting that the exploit was merely a “highly profitable trading strategy” and claiming it was conducted within the bounds of legality and the protocol’s intended design.

According to prosecutors, Eisenberg utilized two accounts to engage in manipulative trading involving futures contracts tied to the values of Mango’s token MNGO and the stablecoin USD Coin.

Last month, US federal prosecutors asked for a prison sentence of up to 6.5 years for Eisenberg.

In their filing, prosecutors emphasized the severity of Eisenberg’s actions, stating that his scheme not only defrauded investors of over $100 million but also forced Mango Markets to shut down.

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