Avraham “Avi” Eisenberg is currently awaiting the jury’s decision on charges related to market manipulation and fraud, following an alleged $110 million exploit of the Mango Markets decentralized exchange. The jury, having listened to closing arguments from both the prosecution and defense on April 17, will continue their deliberations on whether to find Eisenberg guilty of commodities fraud and manipulation after a two-week trial.
In October 2022, Eisenberg is said to have artificially increased the price of a token relative to USD Coin (USDC) through a series of significant purchases on Mango Markets, before withdrawing the assets from the platform. He was subsequently arrested in Puerto Rico in December 2022 by U.S. authorities, who accused him of knowingly engaging in a scheme to manipulate the price of perpetual futures on Mango Markets.
During the closing arguments, Eisenberg’s legal team argued that he had not committed any crimes, but had instead executed a “successful and legal trading strategy,” resulting in gains of approximately $110 million. Prosecutors, on the other hand, claimed that he had “lied” in order to remove funds from Mango Markets, suggesting that fraud was a deliberate part of his plan.
According to Eisenberg’s attorney, as reported by Inner City Press, his client “fully complied with the Mango Markets smart contracts” and withdrew his own capital, emphasizing that it was not a loan. Regarding the remaining funds, Eisenberg’s defense argued that he intended to return them, stating, “He had control of $110 million… But he was seeking to return the funds. Maybe you wouldn’t have done it. But this is how people do it in this world of cryptocurrency. He sent $67 million. What was kept were the profits.”
Following the exploit, Eisenberg did return $67 million worth of cryptocurrency to Mango Markets, but he claimed that he had legally obtained the rest of the funds.
The jury’s verdict could be reached as early as April 18, and if Eisenberg is found guilty, he could face up to 20 years in prison. He has been in custody since January 2023.
In addition to the criminal charges, Eisenberg is also facing civil action from the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission. However, both cases have been put on hold until the conclusion of the criminal trial.
The increasing focus on crypto-related crime by U.S. enforcement agencies is evident in Eisenberg’s case, reflecting their determination to tackle fraudulent activities in the cryptocurrency world.