U.S. judge overturns fraud convictions of Mango Markets exploiter Eisenberg, determining improper venue

A US judge has determined that New York prosecutors had no proper venue to convict Avraham Eisenberg of fraud for his exploit of DeFi trading platform Mango Markets, vacating two of his convictions and acquitting him of a third, in a notable reversal of one of the crypto industry's highest-profile exploit cases. Judge Arun Subramanian, a Biden appointee who is also notably overseeing the criminal case against rapper Sean "Diddy" Combs, ruled on Friday that the evidence in Eisenberg's trial did not determine that prosecutors in the Southern District of New York had proper venue to bring the case against Eisenberg. "He didn't make trades in New York, call or email anyone in New York, or go to New York in connection with his scheme," Judge Subramanian wrote in his ruling. "There is no allegation that the Mango Markets platform had ties to New York."Judge Subramanian argued that the evidence brought by prosecutors at trial, that Eisenberg used an automated trading platform based in New York and that at least one Mango Markets user based in New York attempted a withdrawal following the exploit, did not go far enough in determining proper venue for Eisenberg, who was operating from Puerto Rico at the time of the hack. Consequently, his first two counts of fraud were vacated. Judge Subramanian acquitted Eisenberg of a third, wire-fraud charge, notably arguing that Eisenberg's behavior, manipulating an oracle in order to inflate the value of his holdings on the platform before withdrawing the funds, which Eisenberg's defense argued was a "winning" trading strategy, did not actually violate any wire fraud laws. The charge was also overturned for lack of proper venue. "On a platform with no rules, instructions, or prohibitions about borrowing, the government needed more to show that Eisenberg made an implicit misrepresentation by allowing the algorithm to measure the actual value of his collateral," Judge Subramanian wrote. Now, Justice Department prosecutors will need to decide whether or not to bring an additional case against Eisenberg on the vacated convictions. Despite the overturned charges, Eisenberg still faces a sentence of four years in prison for the possession of child sexual abuse material. He was sentenced in April. “From the beginning, we said this case was fatally flawed,” Eisenberg’s attorney Brian Klein said in a statement to Bloomberg Friday. “We are very pleased for Avi that the judge granted our motion and dismissed the case.”Mango Markets ceased operations earlier this year following a tumultuous history and several legal cases. Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.