U.S. judge overturns fraud convictions of Mango Markets exploiter Avraham Eisenberg, the judge ruled that New York prosecutors had no proper venue to bring the case

A U.S. federal judge has overturned the fraud and market manipulation convictions of Avraham Eisenberg, the trader who exploited the decentralized finance (DeFi) platform Mango Markets for $110 million in October 2022.

The ruling, issued by Judge Arun Subramanian on May 24, 2025, determined that the government failed to prove Eisenberg made materially false representations to the platform, and that the Southern District of New York was an improper venue for the case.

Judge Subramanian found that Mango Markets' permissionless and automated design meant there was no legal basis for claiming deception.

Eisenberg's actions, which involved inflating the price of Mango's MNGO token by over 1,300% and using the gains as collateral to withdraw funds, were executed through the platform's smart contracts without misrepresentation.

The court ruled that the Southern District of New York was not the appropriate venue for the trial. Eisenberg conducted the trades from Puerto Rico, and the government's attempts to link the case to New York through a Mango user in Poughkeepsie and a third-party vendor in Manhattan were deemed insufficient.

Despite the overturned convictions in the Mango Markets case, Eisenberg remains incarcerated due to a separate conviction. On May 1, 2025, he was sentenced to nearly four years in prison after pleading guilty to possession of child sexual abuse material, a charge stemming from evidence found during his 2022 arrest.

Additionally, Eisenberg faces ongoing civil lawsuits from the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and MNGO token holders. These cases are currently on hold pending the resolution of the criminal matters.

Mango Markets, a decentralized exchange on the Solana blockchain, ceased operation earlier this year by the combination of a catastrophic exploit, legal repercussions, regulatory enforcement, and a loss of community confidence, leading to a unanimous decision to wind down the platform.

Major Exploit and Security Failure

In October 2022, trader Avraham “Avi” Eisenberg manipulated the price of the MNGO token by exploiting a vulnerability in the platform’s oracle system, resulting in a loss of over $100 million. Although some funds were returned following a community vote, Eisenberg kept a significant portion, leading to his arrest and criminal charges for fraud and market manipulation.

Legal and Regulatory Pressure

Mango Markets faced ongoing legal troubles, including charges from the U.S. Securities and Exchange Commission (SEC). The SEC accused the platform of selling unregistered securities (MNGO tokens) and acting as an unregistered broker. As part of a settlement, Mango DAO agreed to pay a $700,000 civil penalty, destroy MNGO tokens, and petition exchanges to delist them.

Loss of User Trust and Value

The exploit and subsequent legal issues led to a dramatic decline in user trust and the platform’s total value locked (TVL), which dropped from $210 million in November 2021 to just $9 million by early 2025.

Community Governance Decisions

The Mango DAO, the platform’s decentralized governance body, voted unanimously to wind down operations. Governance proposals were approved to halt borrowing and lending, making the platform’s core services economically unviable. Contributors expressed a desire to move on from ongoing legal battles and financial decline.

Regulatory Scrutiny

The shutdown reflects broader regulatory pressure on decentralized finance (DeFi) platforms, with Mango Markets becoming a prominent example of a project forced to comply with traditional financial regulations.

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