DeFi Trader Eisenberg ‘Wasn’t Borrowing, He Was Stealing,’ Prosecutor Says in Opening Argument

On Tuesday, both parties delivered clear-cut opening arguments in the U.S. commodities manipulation and fraud trial involving Eisenberg. The contrasting stories provided the jury with a glimpse into the intricate details of the upcoming two-week long court proceedings.

The October 2022 incident involves Eisenberg converting $13 million worth of cryptocurrency into a staggering $110 million through manipulation of Mango Markets. He achieved this, in part, by engaging in self-contradictory trades.

He significantly wagered on MNGO tokens’ future price increase and is accused of manipulating cryptocurrency markets to boost their worth. After the token’s price surged over 1,000%, he obtained a loan using the tokens as collateral, seizing nearly all crypto assets linked to MNGO, leading to its insolvency.

At conventional banks, swaps shops, and equities exchanges, certain types of trades are prohibited or heavily regulated in the US. Mango Markets, however, is distinct from these establishments. Instead of being a traditional company, it consists of computer programs running on a blockchain, making some regulations less applicable.

According to federal prosecutors, Eisenberg is the first crypto trader who could be sent to prison for reportedly violating commodities regulations during DeFi trading.

During the opening arguments of the case, Assistant U.S. Attorney Tian Huang described Eisenberg’s actions as reminiscent of a deceitful charlatan who entices people into giving him loans under the false pretense of providing them with a valuable “diamond ring replica” as security.

In her opening statement, she expressed that he hadn’t truly borrowed items, but rather taken them without permission. Additionally, she accused him of committing commodities fraud and manipulating the market.

The government intends to examine Eisenberg’s personal messages, open market transactions, and travel documents as evidence that he was aware of his large, supposedly fraudulent wagers being unlawful.

Eisenberg’s trial team of five indicated they plan to leverage crypto’s unclear legal standing and infancy for their benefit. In his opening argument, Sanford Talkin expressed doubt that the government would be able to quickly impose commodity regulations on highly volatile tokens such as MNGO.

Despite this, their defense relies on the validity of Eisenberg’s actions in a market characterized by risky investments offering large returns.

Avi Eisenberg invested his personal savings of $13 million in Mango Markets with the potential to earn a profit of $110 million. However, there was also a risk involved that he could have lost all of his investment. (Or) Avi Eisenberg put $13 million of his own money at stake in Mango Markets and stood to gain $110 million, but he also faced the possibility of losing everything.

The traders at Mango Markets acknowledged and were prepared for the uncertainties involved in their business dealings. Eisenberg merely struck it rich by chance.

In the real world, Avi Eisenberg ran a profitable and lawful trading business, according to Talkin.