Avi Eisenberg, a 28-year-old crypto trader, faces a crucial verdict from a New York jury as they determine whether his $110 million trades on Mango Markets in October 2022 were fraudulent or fair game. The trial, which began with closing arguments on Wednesday, follows Eisenberg’s arrest in Puerto Rico in December 2022 on charges of commodities fraud, commodities manipulation, and wire fraud.
Eisenberg, dressed in a dark gray suit, sat quietly as his mother and two family members watched from the gallery. His defense team, which initially suggested he might testify, ultimately chose not to call him to the stand. Instead, they relied on the testimony of Jeremy Sheridan, a former Secret Service agent turned crypto investigations consultant.
Sheridan’s testimony focused on the mechanisms that enabled Eisenberg’s trades and the complexities of Mango Markets’ codebase. However, much of his testimony was dismissed after the court found his knowledge of the platform’s codebase insufficient.
Prosecutors argue that Eisenberg manipulated the market by trading large sums of MNGO perpetual futures contracts between himself, artificially inflating the price by over 1000%. He then used his newly-created collateral to drain $110 million in various cryptocurrencies via the platform’s “borrow” function.
Eisenberg’s defense team, led by high-profile crypto defense attorney Brian Klein, maintains that his trades were a “successful and legal trading strategy” that fully complied with Mango Markets’ protocol. They point to the platform’s lack of Terms of Use and the “use at your own risk” disclaimer as evidence that Eisenberg acted within the rules.
Klein, whose past clients include Erik Voorhees, Charlie Shrem, and Virgil Griffith, emphasized that Eisenberg’s trades were consistent with crypto market practices. Prosecutors, however, argue that Eisenberg’s actions were criminal, pointing to his internet searches for “statute of limitations market manipulation” and “elements of fraud” before the trades, as well as his attempts to flee to Israel after the exploit.
The jury will now decide whether Eisenberg’s trades were fraudulent or a legitimate trading strategy, potentially impacting the broader crypto market’s perception of decentralized finance platforms and their vulnerabilities. Eisenberg faces up to 20 years in prison if convicted on all three counts.
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Source: Coindesk
