NEW
YORK
—
Crypto
trader
Avi
Eisenberg’s
fate
now
rests
in
the
hands
of
12
New
York
jurors,
who
have
been
tasked
with
deciding
whether
his
October
2022
trades
on
Mango
Markets
–
which
netted
him
$110
million
–
were
fair
game
or
fraud.
On
Wednesday,
the
jury
heard
closing
arguments
in
the
government’s
case
against
Eisenberg,
who
was
arrested
in
Puerto
Rico
in
December
2022
and
charged
with
commodities
fraud,
commodities
manipulation
and
wire
fraud
in
connection
with
his
Mango
Markets
exploit
two
months
earlier.
Eisenberg,
28,
was
clad
in
a
dark
gray
suit.
His
mother
and
two
other
family
members
were
in
the
gallery
during
the
proceedings.
Though
his
attorneys
suggested
he
may
testify
earlier
in
the
trial,
his
defense
ultimately
rested
without
calling
him
to
the
stand.
The
defense’s
case
on
Monday
and
Tuesday
largely
hinged
on
a
single
expert
witness,
former
Secret
Service
agent-turned
crypto
investigations
consultant
Jeremy
Sheridan.
Over
two
days
of
testimony
he
spoke
to
the
mechanisms
that
enabled
Eisenberg’s
trades
and
the
difficulty
of
understanding
whether
his
borrows
were,
according
to
Mango
Markets’
codebase,
actually
borrows
at
all.
But
much
of
his
testimony
got
thrown
out
by
the
judge
after
the
court
determined
his
knowledge
of
Mango
Markets’
codebase
was
itself
insufficient.
Prosecutors
have
argued
that
Eisenberg
engaged
in
market
manipulation,
trading
large
sums
of
MNGO
perpetual
futures
contracts
between
himself
to
pump
the
price
over
1000%,
then
using
his
newly-created
collateral
to
fool
the
platform
into
allowing
him
drain
$110
million
in
various
cryptocurrencies
via
the
platform’s
“borrow”
function.
But
Eisenberg
wasn’t
borrowing,
prosecutors
told
the
jury
on
Wednesday
–
he
was
stealing.
Hours
after
the
exploit,
he
issued
an
“extortionate”
anonymous
proposal
to
the
Mango
Markets
decentralized
autonomous
organization
(DAO)
offering
to
return
$67
million
of
his
haul
in
exchange
for
promises
not
to
pursue
criminal
charges
or
freeze
the
rest
of
the
stolen
funds.
The
facts
of
the
case
were
largely
undisputed
by
Eisenberg’s
defense
team
when
they
took
the
stand.
Instead,
Eisenberg’s
lead
attorney,
Brian
Klein,
attempted
to
frame
Eisenberg’s
massive
trades
as
a
“successful
and
legal
trading
strategy”
that
“fully
complied”
with
the
Mango
Markets
protocol.
Klein
pointed
to
Mango
Markets’
lack
of
Terms
of
Use
–
only
a
checkbox
that
told
visitors
to
use
the
site
“at
your
own
risk”
–
at
the
time
of
Eisenberg’s
exploit,
arguing
that
he
simply
used
the
platform
as
intended
and
made
a
lot
of
money
doing
it.
“This
is
how
people
do
things
in
this
world
of
crypto,”
Klein
told
the
jury.
Klein
is
a
well-known
defense
attorney
in
the
crypto
sphere,
whose
past
clients
include
Erik
Voorhees,
Charlie
Shrem
and
Virgil
Griffith.
Klein
is
also
currently
representing
Tornado
Cash
developer
Roman
Storm.
Prosecutors
told
the
jury
a
different
version
of
the
story.
Eisenberg,
they
said,
knew
what
he
was
doing
was
illegal.
Before
his
exploit,
Eisenberg
had
sued
someone
else
in
federal
court
for
manipulating
the
price
of
WAVES.
He’d
also
made
internet
searches
for
things
like
“statute
of
limitations
market
manipulation”
and
“elements
of
fraud”
before
his
October
2022
trades.
After
the
trades
–
and
once
his
identity
as
the
exploiter
had
been
exposed
–
Eisenberg
bought
a
ticket
for
a
flight
to
Israel
and
searched
for
“FBI
surveillance,”
“list
of
Israel
extraditions”
and
“Otisville
prison,”
a
white-collar
federal
penitentiary.
“That’s
what
you
do
when
you
think
you’ve
committed
a
crime,”
the
prosecutor
told
the
jury.
Klein
told
the
jury
Eisenberg
didn’t
go
to
Israel
to
escape
charges,
but
instead
because
angry
Mango
Markets’
users
were
threatening
his
safety.
Klein
also
said
that
the
fact
that
Eisenberg
sued
both
Circle
and
AscendX,
a
nominally
Romanian
exchange,
to
get
his
money
back
once
it
was
frozen
–
as
well
as
his
willing
return
to
the
U.S.
–
was
further
evidence
that
he
did
not
believe
he
had
committed
a
crime.
In
their
rebuttal,
prosecutors
said
that
Eisenberg’s
legal
attempts
to
get
his
money
were
made
after
his
identity
as
the
exploiter
had
been
exposed.
He
thought
that
his
proposal
to
Mango
Markets’
DAO,
and
its
subsequent
“waiver
of
liability,”
meant
he
was
off
the
hook,
emboldening
him
to
come
back
to
the
U.S.,
they
said.
“Manipulation,
lies,
deceit
–
it’s
criminal,
whether
it
happens
on
Wall
Street
or
on
a
computer
program,”
the
prosecutor
said.
Eisenberg
faces
up
to
20
years
in
prison
if
convicted
on
all
three
counts.
