Jury Begins Deliberations in $110M Mango Markets Fraud Trial

On Wednesday, the jury listened to the final speeches from the government in their case against Eisenberg. He was taken into custody in Puerto Rico in December 2022 and subsequently accused of commodities fraud, manipulation, and wire fraud linked to his actions at Mango Markets in October 2022.

Eisenberg, aged 28, wore a dark-gray suit during the court session. His mother and two other relatives looked on from the gallery as the hearing unfolded. Despite the recommendation of his lawyers that he take the stand earlier in the trial, Eisenberg’s defense team chose not to call him as a witness.

On Monday and Tuesday, the defense heavily relied on Jeremy Sheridan, a former Secret Service agent now working as a crypto investigations consultant, as their main expert witness. Over the course of two days, Sheridan testified about the workings behind Eisenberg’s trades and the complexity of deciphering whether they were indeed borrows, based on Mango Markets’ codebase. However, a significant portion of his testimony was disregarded by the judge after it was established that Sheridan did not possess an adequate understanding of Mango Markets’ coding system.

Prosecutors claim that Eisenberg manipulated the market by trading vast amounts of MNGO perpetual futures contracts with himself, artificially increasing the price over 1000%. Afterward, he leveraged his inflated collateral to deceive the platform into granting him access to borrow $110 million in cryptocurrencies.

During the trial, Eisenberg’s defense team did not dispute most of the facts presented. Instead, Brian Klein, Eisenberg’s main lawyer, tried to portray Eisenberg’s large trades as a prosperous and lawful trading method that strictly adhered to Mango Markets’ regulations. Klein emphasized that there were no clear Terms of Use on the site at the time of Eisenberg’s exploit, only a warning for users to proceed with caution. According to Klein, Eisenberg merely utilized the platform as intended and made significant profits from it.

“This is how people do things in this world of crypto,” Klein told the jury.

Klein is widely recognized as a skilled defense lawyer in the cryptocurrency community. Notable past clients of Klein’s include Erik Voorhees, Charlie Shrem, and Virgil Griffith. At present, Klein is representing Roman Storm, the developer of Tornado Cash, in their legal proceedings.

Prosecutors presented an alternate account of the events to the jury, implying that Eisenberg was aware that his actions were against the law.

Prior to his controversial actions, Eisenberg filed a lawsuit against someone else in a federal court, alleging price manipulation of WAVES. He also conducted online research on topics such as the statute of limitations for market manipulation and the components of fraud. Following his October 2022 trades, once his identity was revealed as the perpetrator, Eisenberg purchased a plane ticket to Israel and looked up information on FBI surveillance, a list of extraditions from Israel, and Otisville Federal Penitentiary, known for housing white-collar offenders.

“That’s what you do when you think you’ve committed a crime,” the prosecutor told the jury.

Klein explained to the jury that Eisenberg didn’t travel to Israel to dodge accusations, but rather due to concerns for his safety following threatening messages from displeased Mango Markets users. Furthermore, Klein pointed out that Eisenberg’s legal actions against Circle and AscendX, as well as his eventual return to the United States, were proof that he didn’t believe he had done anything wrong.

“The prosecutor expressed that manipulation, dishonesty, and deceit are unlawful actions, whether they occur in the financial world of Wall Street or through the use of computer programs.”

Eisenberg faces up to 20 years in prison if convicted on all three counts.