Avi Eisenberg "wasn't borrowing, he was stealing," prosecutor says in opening argument. The defense countered that Eisenberg "risked 13 million of his own dollars" to net $110 million from Mango Markets

In April 2024, U.S. prosecutors and defense attorneys delivered sharply contrasting opening statements in the criminal trial of Avraham “Avi” Eisenberg over his October 2022 exploit of the Solana-based DeFi platform Mango Markets. Prosecutors alleged that Eisenberg executed a fraudulent market-manipulation scheme to obtain roughly $110 million in crypto from Mango and its users, arguing that he “wasn’t borrowing, he was stealing” by artificially inflating the price of Mango’s governance token MNGO and then using the inflated perpetual futures position as collateral to drain the protocol. According to U.S. authorities and parallel SEC and CFTC complaints, Eisenberg used accounts he controlled to trade large volumes of MNGO derivatives, rapidly bid up the thinly traded token on external exchanges that fed Mango’s price oracle, and then withdrew nearly all available assets from the platform once collateral values were mispriced. The defense framed the same conduct as a high‑risk, rules‑compliant trading strategy rather than fraud, emphasizing that Eisenberg put up about $13 million of his own capital and operated within Mango’s publicly known smart‑contract parameters, in a system that lacked explicit prohibitions on this type of price manipulation or any formal obligation to repay loans. Eisenberg himself had previously characterized the episode as a “highly profitable trading strategy” and later negotiated with Mango’s DAO to return a portion of the funds in exchange for a settlement and a promise not to pursue legal claims, which became part of the broader debate over whether the episode was a “hack,” an exploit, or simply aggressive trading. The case was closely watched because it tested how traditional fraud and market‑manipulation laws apply to DeFi protocols, oracle‑based pricing, and governance tokens, and raised questions about where the line lies between exploiting code, violating unwritten norms, and committing prosecutable financial crime. In April 2024, a New York jury convicted Eisenberg of commodities fraud, commodities market manipulation, and wire fraud in connection with the Mango Markets exploit. However, in May 2025, U.S. District Judge Arun Subramanian vacated all of those convictions, granting a post‑trial motion for acquittal on the grounds that prosecutors had not properly established venue in the Southern District of New York and had failed to show a materially false statement to support the wire‑fraud theory, particularly given Mango’s lack of explicit rules governing borrowing, manipulation, or collateral obligations. The reversal underscored the legal and jurisdictional complexities of applying existing U.S. financial‑crime statutes to decentralized trading platforms and may influence how future DeFi‑related enforcement actions are structured and where they are brought.

✨ AI-generated background, compiled from web sources — not editorial content.

More coverage

• US Prosecutors Seek 6.5-Year Sentence for Mango Markets Hacker ... (binance.com)
• [PDF] Avraham Eisenberg - SEC.gov (sec.gov)
• CFTC Charges Avraham Eisenberg with Manipulative and ... (cftc.gov)
• [PDF] AVRAHAM EISENBERG, Def - Southern District of New York (nysd.uscourts.gov)
• Venue Fatal in Crypto Fraud Case: An Important Legal Challenge ... (venable.com)

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