Court Drops All Charges Against Abraham Eisenberg in Mango Markets Case
Date: 2025-05-26 Author: Henry Casey Categories: BUSINESS
The District Court for the Southern District of New York has dropped all charges against Abraham Eisenberg, who was suspected of manipulation and fraud related to the Mango Markets platform. Judge Arun Subramanian ruled that the evidence presented by the prosecution did not allow Eisenberg's actions to be classified as criminal.
According to the court's decision, the charges of violating the law on commodity manipulation and fraud were found to be legally unfounded. The key argument was the lack of specific actions committed directly in New York. Eisenberg, according to the investigation, carried out all transactions remotely, while located in Puerto Rico. This excluded the possibility of bringing him to justice within the SDNY jurisdiction.
The Justice Department had previously claimed that Eisenberg had defrauded Mango Markets' smart contract lending system. However, the defense argued that this was not fraud, but rather a technical exploit of a vulnerability in the platform's code. The judge upheld this position, noting that the platform operated automatically and could not be "deceived" in the legal sense.
The incident that prompted the trial occurred in October 2022. At that time, Eisenberg allegedly used 5 million USDC to open contrarian positions in futures contracts on the MNGO token. Using trades on the FTX, Serum, and AscendEX platforms, he was able to sharply increase the price of the asset. He then withdrew over $100 million in cryptocurrency from Mango Markets and crashed the token's price, profiting from its fall.
Despite this, in April 2024, the jury found him guilty. Eisenberg faced up to 20 years in prison. However, the final verdict overturned these charges, casting doubt on the criminality of the incident.
Thus, this case became a landmark precedent in the legal assessment of actions on DeFi platforms, where the boundaries between code exploitation and fraud are still blurred.
