Avraham Eisenberg’s Fraud Convictions in Mango Markets Scheme Vacated by NY Federal Judge
On Friday, May 23, 2025, Judge Arun Srinivas Subramanian of the US District Court for the Southern District of New York granted a motion by cryptocurrency investor Avraham Eisenberg to vacate his convictions on charges of commodities fraud, commodities manipulation, and wire fraud. The ruling followed a nine-day trial where a jury had convicted Eisenberg on all three counts related to a scheme involving Mango Markets, a cryptocurrency exchange platform.
Eisenberg was charged in January 2023 with defrauding Mango Markets and stealing over $100 million in cryptocurrency. The government alleged that on October 11, 2022, Eisenberg executed a scheme by depositing approximately five million USDC into two wallets on Mango Markets. He used one wallet to buy and the other to sell MNGO Perpetuals, a type of futures contract tied to the MNGO token, holding both long and short positions. Eisenberg then purchased MNGO tokens on three exchanges—FTX, AscendEX, and Serum—which increased the oracle price of MNGO, inflating the value of his long position. He borrowed against this position, withdrew funds, and then sold MNGO, causing the oracle price to drop and boosting his short position, against which he borrowed further funds. In total, Eisenberg withdrew over $100 million in cryptocurrency from Mango Markets.
The court’s decision to vacate the convictions rested primarily on improper venue. Eisenberg, who was in Puerto Rico during the scheme, argued that the Southern District of New York was not the appropriate jurisdiction. The government claimed venue was proper due to the presence of HD Consulting, a vendor for AscendEX, in Manhattan, and because a Mango Markets user, John Casey, was in Poughkeepsie, New York, and attempted to withdraw funds after noticing price fluctuations caused by Eisenberg’s actions.
However, Judge Subramanian ruled that neither the activities of HD Consulting’s New York team, which reviewed trading data for compliance, nor Casey’s actions constituted “essential conduct” of Eisenberg’s offenses. The court found no evidence that Eisenberg’s trades were executed, cleared, or settled in New York, or that he knowingly sent wires to the district.
For the wire fraud charge, the court also found insufficient evidence of falsity. The government alleged Eisenberg misrepresented his intent to borrow funds from Mango Markets and the value of his collateral. However, the court noted that Mango Markets had no terms of service requiring users to repay borrowed funds or prohibiting manipulation. The platform’s automated system calculated Eisenberg’s collateral value, which was accurate at the time of borrowing, despite being artificially inflated by his actions. The court concluded that Eisenberg did not make a false representation, as the platform’s lack of rules meant there was no obligation to disclose manipulation or maintain collateral value.
On the commodities fraud and manipulation charges, Eisenberg argued that MNGO Perpetuals were not covered by the Commodities Exchange Act (CEA), as the MNGO token was a security, not a commodity. The government contended that MNGO Perpetuals were “mixed swaps” under the CEA. The court found sufficient evidence that MNGO Perpetuals met the CEA’s definition of swaps and that Eisenberg manipulated their settlement price, which determined the value of his positions. However, the venue issue led to the vacatur of these convictions.
The court rejected Eisenberg’s request for a new trial under Rule 33, finding that the government’s summation statements and the jury instructions on venue and mixed swaps did not warrant a retrial. The ruling vacated Eisenberg’s convictions on the commodities charges and will enter a judgment of acquittal on the wire fraud charge.
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