- A U.S. federal judge has overturned Avraham Eisenberg’s fraud and market manipulation convictions related to the Mango Markets exploit
- The court found that prosecutors failed to prove Eisenberg made false representations to the decentralized platform
- Despite the overturned convictions, Eisenberg remains incarcerated due to a separate child pornography conviction
Avraham Eisenberg, who was convicted for exploiting the decentralized exchange Mango Markets, has had his fraud and market manipulation convictions vacated by a U.S. federal judge. The court determined that the prosecution did not sufficiently prove that Eisenberg made false representations to the platform, which operates through smart contracts. However, Eisenberg continues to serve a prison sentence for an unrelated child pornography conviction.
$110 Million Exploit
On May 24, 2025, U.S. District Judge Arun Subramanian vacated the fraud and market manipulation convictions against Avraham Eisenberg, who had been accused of exploiting Mango Markets, a decentralized finance platform, to the tune of $110 million. The judge ruled that the prosecution failed to demonstrate that Eisenberg made materially false representations to the platform, which operates on permissionless and automated smart contracts.
Eisenberg’s defense argued that he merely took advantage of the platform’s flawed design without making any deceptive statements. The court agreed, noting that the system’s permissionless nature meant it couldn’t be deceived in a legal sense. As Judge Subramanian stated, “There was insufficient evidence of falsity.”
Jurisdictional Challenges and Legal Implications
The court also addressed jurisdictional issues, determining that the Southern District of New York was not the appropriate venue for the case. Eisenberg conducted his activities from Puerto Rico, and the prosecution’s attempts to tie the case to New York through peripheral connections were deemed insufficient.
This ruling highlights the complexities of applying traditional legal frameworks to decentralized finance platforms, where actions are executed through code without centralized oversight. The decision may set a precedent for how courts handle similar cases in the evolving landscape of cryptocurrency and decentralized finance.
Ongoing Incarceration Due to Separate Conviction
Despite the overturned convictions related to Mango Markets, Eisenberg remains incarcerated. Earlier this month, he was sentenced to over four years in prison after pleading guilty to possession of child sexual abuse material, a charge stemming from evidence found during his 2022 arrest.
Eisenberg also faces separate civil lawsuits filed by the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Department of Justice has not yet announced whether it will pursue the vacated charges in another jurisdiction.
