Avraham Eisenberg, the Trader Accused of Draining Millions from Mango Markets, Has Major Fraud Charges Against Him Dropped

A federal judge has thrown out major fraud charges against Avraham Eisenberg, the trader accused of draining millions from DeFi platform Mango Markets

A federal judge has tossed major fraud charges against Avraham Eisenberg, the trader accused of draining millions from DeFi platform Mango Markets, over jurisdictional flaws in the government’s case.

Judge Arun Subramanian struck down two fraud convictions and dismissed a wire fraud count from a December trial, ruling that New York prosecutors failed to sufficiently demonstrate how Eisenberg’s actions—which were carried out from Puerto Rico—had legal ties to the Southern District of New York.

The court found no evidence linking the exploit to any New York-based activity, rendering the two counts of commodities fraud and one count of wire fraud fundamentally flawed, particularly given that Eisenberg’s use of a market manipulation tactic involving a price oracle was not enough to support criminal liability, especially considering the platform’s lack of defined rules governing such behavior.

"The government's theory of criminal liability ultimately founders on the lack of clear legal and factual basis to support each and every element of the offenses charged in the Indictment," Judge Subramanian wrote in his decision.

Eisenberg's legal team welcomed the ruling, saying in a statement that the prosecution was "fundamentally flawed" and had "failed to establish jurisdiction or criminal liability."

"We are pleased that the Court agreed with our arguments and dismissed the charges," Eisenberg's attorneys said.

"The government's attempt to shoehorn Avraham's actions into traditional legal frameworks in an attempt to render them criminal was ultimately unsuccessful."

Eisenberg, who remains in prison serving a four-year sentence related to possession of child sexual abuse material in an unrelated case, had been accused of manipulating the price of a token on Mango Markets to inflate the value of his account and withdraw funds beyond his initial deposit.

The platform, which was already battling legal disputes and financial instability, has since shut down operations.

The Justice Department is yet to announce if it will pursue the vacated charges in another jurisdiction.

The ruling could have broader implications for how U.S. courts approach cross-border cases involving decentralized platforms, especially as prosecutors attempt to apply traditional legal frameworks to crypto ecosystems with no centralized oversight or geographic boundaries.