Manipulator of Mango Markets Convicted! Prosecutor: Conditions for fraud offense were met as he Googled it.

Bloomberg reported that Avi Eisenberg, the exploiter of the vulnerabilities in the DeFi platform Mango Markets which suffered losses exceeding $110 million due to market manipulation, was convicted by a jury yesterday on charges of wire fraud, commodities fraud, and manipulation, and could face up to 20 years in prison.

Will the trial of the Mango Markets market manipulator set a precedent for the "Code is law" era?

Prelude: The Mango Markets Incident

In October 2022, Avraham Eisenberg was arrested in Puerto Rico by the U.S. FBI for allegedly manipulating the spot and derivative markets of Mango Markets, a popular DeFi protocol on Solana, and profiting approximately $116 million.

The Saga of Mango Markets Hack | Long and Short, Market Manipulation, Draining $116 Million

Eisenberg Convicted

According to a press release from the Department of Justice's Public Affairs Office issued on Thursday, a federal jury in New York found the defendant Eisenberg guilty of commodity fraud, market manipulation, and telecommunication fraud related to manipulating Mango Markets.

In a statement, U.S. Attorney for the Southern District of New York Damian Williams said:

This groundbreaking prosecution underscores our office's ability to protect all financial markets by using innovative approaches and cutting-edge enforcement tools.

FBI Criminal and Cyber Division Assistant Director Timothy Langan reiterated, "Whether in the realm of cryptocurrency or other forms of market manipulation, wrongdoers will be held accountable for their ill-gotten gains."

It is alleged that with the criminal conviction, Eisenberg may also face civil enforcement actions brought by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Prosecutor: Why Flee If No Crime Committed

During the trial, Eisenberg's defense attorney Brian Klein attempted to portray the defendant's trades on Mango Markets as "legitimate" and "successful" trading strategies, claiming full compliance with the protocol's code and rules at the time.

However, the jury sided with the prosecutor's argument, deeming his actions as "brazen" fraud and manipulation crimes.

The prosecutor also presented various pieces of evidence to the jury, including Eisenberg's internet searches for terms such as "market manipulation," "FBI surveillance," and "elements of fraud," as well as his flight to Puerto Rico after his identity was revealed, indicating his awareness of the criminal nature of his actions.

Defense Attorney: Fleeing to Evade Threats

In response, Klein stated that Eisenberg fled due to receiving numerous threats following the trades.

Facing the initial unfavorable outcome, Klein also stated that they will continue to appeal:

We are very disappointed, but we will continue to fight for our client and will be filing a series of post-trial motions.

It is reported that Eisenberg could face up to 20 years in prison for the aforementioned charges, with a sentencing hearing scheduled for July 29th.