Avraham Eisenberg, Convicted in First US Crypto Manipulation Case, Moves for Acquittal

Avraham Eisenberg, the first person criminally convicted of cryptocurrency market manipulation, filed a motion seeking to overturn his conviction.

Eisenberg was convicted in April of this year by a federal jury on charges of commodities fraud, commodities manipulation and wire fraud related to his trading activities in October 2022 on decentralized exchange Mango Markets. However, Eisenberg’s lawyers from the firm Talkin, Muccigrosso & Roberts argue there were flaws in both the law and evidence presented at trial that invalidate some or all of the guilty verdicts.

In their 77-page motion filed last month, Eisenberg’s legal team puts forward five key objections. First, they say venue was improper in the Southern District of New York for these criminal charges. Second, they believe the Commodity Exchange Act does not apply to this case related to transactions made using cryptocurrency tokens.

Third, the defense argues prosecutors did not adequately demonstrate Eisenberg intended to manipulate prices in the market. His trades, the motion states, were simply market transactions. Fourth, his alleged deceptions outlined by the prosecution were immaterial and not actually false. Finally, Eisenberg’s lawyers claim the government failed to prove interstate wires were used, an element required for the wire fraud conviction.

Due to these issues, the motion requests the court either acquit Eisenberg of all charges or grant a new trial. U.S. District Judge Arun Subramanian has ordered prosecutors to respond to the motion by mid-September.

According to evidence presented at trial, Eisenberg was accused of carrying out a scheme using two accounts on Mango Markets in October to simultaneously buy and sell leveraged futures contracts. This allegedly caused the value of his holdings to rapidly increase over 20 minutes by 1,300%, allowing Eisenberg to then withdraw $110 million in various cryptocurrencies from his borrowed position.

Federal prosecutors also alleged Eisenberg possessed child pornography on electronic devices, including some images depicting children under 12 years old.