- Federal jurors in New York are currently deliberating over a high-profile case involving a 28-year-old trader accused of manipulating the Mango Markets cryptocurrency exchange.
- This is the first time a US jury is tasked with deciding whether someone manipulated a crypto market.
- Eisenberg allegedly orchestrated fake trades of Mango’s token; his lawyers argue that their client executed a legal and successful trading strategy.
Federal jurors in New York are currently deliberating over a high-profile case involving Avi Eisenberg, a 28-year-old trader accused of manipulating the Mango Markets cryptocurrency exchange to steal a staggering $110 million. The trial marks a significant legal milestone as it is the first time a US jury is tasked with deciding whether someone manipulated a crypto market.
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According to a report, the prosecution presented a compelling argument, alleging that Eisenberg orchestrated fake trades of Mango’s token, MNGO, on October 11, 2022, leading to a 1,300% surge in the value of futures contracts within just 20 minutes. Assistant US Attorney Peter Davis characterized Eisenberg’s actions as “old-fashioned manipulation and fraud,” accusing him of artificially inflating contract values to siphon funds from unsuspecting investors.
On the other side, Eisenberg’s defense team, led by attorney Brian Klein, countered by asserting that their client executed a legal and successful trading strategy within the confines of Mango Markets’ rules. Klein emphasized that Eisenberg had complied with the smart contracts governing the decentralized finance platform and had put his own capital at risk. The defense argued that the platform’s disclaimer, warning users to “use it at your own risk,” absolved Eisenberg of any wrongdoing.
Mango Markets, a platform allowing users to borrow, lend, and trade cryptocurrencies, operated under a decentralized autonomous organization (DAO) framework. Following his alleged windfall, Eisenberg reportedly agreed to return $67 million in cryptocurrency to avoid prosecution or asset freezing by the DAO.
During the trial, evidence was presented suggesting that Eisenberg conducted web searches related to fraud elements, market manipulation statutes of limitations, FBI surveillance, and extradition from Israel prior to his actions on Mango Markets. Prosecutors argued that this web history demonstrated Eisenberg’s awareness of the illegality of his actions.
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Eisenberg, who had been living in Puerto Rico, was arrested upon his return from Israel in December 2022 and has remained in custody since then. The jury is currently deliberating on charges including commodities fraud, commodities manipulation, and wire fraud, with the trial taking place in the US District Court for the Southern District of New York.
The case has sparked discussions around the regulatory framework for decentralized platforms and the accountability of individuals engaging in high-stakes cryptocurrency trading. The outcome of this trial will likely have implications for future legal proceedings involving crypto market manipulation.
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