A U.S. federal judge overturned the fraud and manipulation charges against Avraham Eisenberg, who was accused of executing a $110 million attack on the decentralized exchange Mango Markets.
Last Friday, U.S. District Judge Arun Subramanian ruled that the evidence during the trial was insufficient to support the jury's conclusion that Eisenberg made false statements regarding Mango Markets.
This decision dismissed Eisenberg's charges of commodity fraud and market manipulation and dropped his third charge, significantly weakening the government's case.
Eisenberg was accused of artificially inflating the price of Mango's MNGO tokens by over 1300% in a short period and using it as collateral to withdraw $110 million in crypto assets.
The judge supported Eisenberg.
The Justice Department believes he deceived Mango's smart contract lending system, but Eisenberg's defense argues he merely exploited poorly designed permissionless code and made no false statements.
Judge Subramanian agreed with this assertion, writing that 'Mango Markets is permissionless and automated,' meaning the system cannot be deceived in a legal sense. 'The evidence is insufficient to prove falsity,' the judge added, supporting Eisenberg's interpretation of the DeFi mechanism.
The judge also rejected the prosecution's request to try the case in New York, as Eisenberg was in Puerto Rico during the transactions and the activities related to the alleged crime were not significant in New York.
Although this ruling cleared Eisenberg in the Mango Markets case, he still faces civil lawsuits from the SEC and CFTC.
Eisenberg is charged with child pornography.
In another case, Eisenberg was sentenced to four years in prison for admitting to possessing child pornography, a charge stemming from unrelated evidence found during his arrest.