Jury Begins Deliberations in Avi Eisenberg’s $110 Million Mango Markets Fraud Trial

  • The trial of Avi Eisenberg in connection with his trading on Mango Markets highlights the complex legal challenges in the crypto world. 
  • The case raises questions about what constitutes legal trading strategies versus market manipulation, and how such actions align with the protocols of decentralized platforms.

NEW YORK — The fate of Avi Eisenberg, a crypto trader charged with commodities fraud, commodities manipulation, and wire fraud in connection with an October 2022 exploit on Mango Markets, now lies in the hands of 12 jurors in New York. 

Eisenberg’s trading on Mango Markets netted him $110 million, and his trial reached its closing arguments on Wednesday, with the jury now tasked with determining whether his trades were legitimate or constituted fraud.

Eisenberg, 28, attended court in a dark gray suit, accompanied by his mother and other family members. Despite earlier suggestions that he might testify, his defense ultimately rested its case without putting him on the stand.

The defense’s strategy focused on portraying Eisenberg’s large trades as a “successful and legal trading strategy” in line with Mango Markets’ protocol. Defense attorney Brian Klein pointed to the absence of formal Terms of Use on Mango Markets during the incident, arguing that Eisenberg’s actions fully complied with the platform’s design.

Prosecutors, however, painted a different picture, claiming that Eisenberg engaged in market manipulation by inflating the price of MNGO perpetual futures contracts through self-trading, allowing him to drain $110 million in various cryptocurrencies via the platform’s borrow function.

They emphasized that Eisenberg’s trades were not legitimate borrowing but rather theft, pointing out that shortly after the exploit, Eisenberg made an “extortionate” proposal to the Mango Markets decentralized autonomous organization (DAO), offering to return $67 million of his gains in exchange for promises not to pursue criminal charges or freeze the remaining stolen funds.

The trial also delved into Eisenberg’s previous legal actions and internet searches, which prosecutors argued demonstrated his awareness of the illegality of his actions. These searches included queries about market manipulation statutes and elements of fraud before the October 2022 trades.

Eisenberg’s defense countered that his movements, including a ticket purchased for a flight to Israel, were driven by safety concerns due to threats from angry Mango Markets users. His defense also noted Eisenberg’s willingness to return to the U.S. as evidence that he did not believe he had committed a crime.

In their rebuttal, prosecutors argued that Eisenberg’s return to the U.S. and legal attempts to recover his funds came after his identity as the exploiter had been revealed, suggesting that he thought the Mango Markets DAO’s waiver of liability would protect him.

The jury will now deliberate on the charges against Eisenberg, who faces up to 20 years in prison if convicted on all three counts.

Eisenberg’s Future Hinges on Jury’s Decision

The future of crypto trader Avi Eisenberg now rests in the hands of a New York jury, who must decide whether his actions on Mango Markets in October 2022 were part of a legitimate trading strategy or amounted to fraud. Facing up to 20 years in prison if convicted on all three counts, Eisenberg’s case underscores the ongoing legal challenges within the rapidly evolving world of crypto trading and finance.

Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.

Author: Mehar Nayar

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