NEW YORK — Crypto dealer Avi Eisenberg’s destiny now rests within the arms of 12 New York jurors, who’ve been tasked with deciding whether or not his October 2022 trades on Mango Markets – which netted him $110 million – have been truthful sport or fraud.
On Wednesday, the jury heard closing arguments within the authorities’s case in opposition to Eisenberg, who was arrested in Puerto Rico in December 2022 and charged with commodities fraud, commodities manipulation and wire fraud in connection together with his Mango Markets exploit two months earlier.
Eisenberg, 28, was clad in a darkish grey go well with. His mom and two different relations have been within the gallery throughout the proceedings. Although his attorneys advised he might testify earlier within the trial, his protection in the end rested with out calling him to the stand.
The protection’s case on Monday and Tuesday largely hinged on a single knowledgeable witness, former Secret Service agent-turned crypto investigations marketing consultant Jeremy Sheridan. Over two days of testimony he spoke to the mechanisms that enabled Eisenberg’s trades and the issue of understanding whether or not his borrows have been, in response to Mango Markets’ codebase, truly borrows in any respect. However a lot of his testimony obtained thrown out by the decide after the court docket decided his data of Mango Markets’ codebase was itself inadequate.
Prosecutors have argued that Eisenberg engaged in market manipulation, buying and selling massive sums of MNGO perpetual futures contracts between himself to pump the worth over 1000%, then utilizing his newly-created collateral to idiot the platform into permitting him drain $110 million in numerous cryptocurrencies through the platform’s “borrow” operate.
However Eisenberg wasn’t borrowing, prosecutors instructed the jury on Wednesday – he was stealing. Hours after the exploit, he issued an “extortionate” nameless proposal to the Mango Markets decentralized autonomous group (DAO) providing to return $67 million of his haul in change for guarantees to not pursue prison fees or freeze the remainder of the stolen funds.
The information of the case have been largely undisputed by Eisenberg’s protection staff after they took the stand. As a substitute, Eisenberg’s lead lawyer, Brian Klein, tried to border Eisenberg’s large trades as a “profitable and authorized buying and selling technique” that “totally complied” with the Mango Markets protocol. Klein pointed to Mango Markets’ lack of Phrases of Use – solely a checkbox that instructed guests to make use of the positioning “at your individual threat” – on the time of Eisenberg’s exploit, arguing that he merely used the platform as meant and made some huge cash doing it.
“That is how individuals do issues on this world of crypto,” Klein instructed the jury.
Klein is a widely known protection lawyer within the crypto sphere, whose previous shoppers embrace Erik Voorhees, Charlie Shrem and Virgil Griffith. Klein can also be presently representing Twister Money developer Roman Storm.
Prosecutors instructed the jury a special model of the story. Eisenberg, they stated, knew what he was doing was unlawful.
Earlier than his exploit, Eisenberg had sued another person in federal court docket for manipulating the worth of WAVES. He’d additionally made web searches for issues like “statute of limitations market manipulation” and “components of fraud” earlier than his October 2022 trades. After the trades – and as soon as his id because the exploiter had been uncovered – Eisenberg purchased a ticket for a flight to Israel and looked for “FBI surveillance,” “record of Israel extraditions” and “Otisville jail,” a white-collar federal penitentiary.
“That’s what you do once you suppose you’ve dedicated against the law,” the prosecutor instructed the jury.
Klein instructed the jury Eisenberg didn’t go to Israel to flee fees, however as an alternative as a result of indignant Mango Markets’ customers have been threatening his security. Klein additionally stated that the truth that Eisenberg sued each Circle and AscendX, a nominally Romanian change, to get his a reimbursement as soon as it was frozen – in addition to his keen return to the U.S. – was additional proof that he didn’t consider he had dedicated against the law.
Of their rebuttal, prosecutors stated that Eisenberg’s authorized makes an attempt to get his cash have been made after his id because the exploiter had been uncovered. He thought that his proposal to Mango Markets’ DAO, and its subsequent “waiver of legal responsibility,” meant he was off the hook, emboldening him to come back again to the U.S., they stated.
“Manipulation, lies, deceit – it’s prison, whether or not it occurs on Wall Road or on a pc program,” the prosecutor stated.
Eisenberg faces as much as 20 years in jail if convicted on all three counts.