On May 23, 2025, the District Court for the Southern District of New York (SDNY) overturned a jury verdict against Mango Markets trader Avraham Eisenberg, granting a motion for judgment of acquittal based on venue deficiencies and insufficient evidence. Specifically, the Court found that the government had not sufficiently linked Eisenberg’s manipulative trading conduct to New York and had failed to prove a false statement to support a conviction for wire fraud.
The significance of this decision cannot be overstated. Courts rarely grant Rule 29 motions overturning a jury verdict, especially on venue grounds. This is especially the case considering that federal prosecutors need only prove venue by a preponderance of the evidence—whereas the other elements of an offense must be proved beyond a reasonable doubt. The decision highlights the challenges of crypto industry-related prosecutions in the decentralized finance space and will no doubt curtail law enforcement’s often overly expansive view of jurisdiction and venue.
The evidence at trial showed that, while operating from Puerto Rico, Eisenberg undertook a scheme to defraud Mango Markets of millions of dollars in cryptocurrency. Eisenberg created two accounts on Mango Markets and used one account to buy, and the other to sell, the same “MNGO Perpetuals” (futures contracts for MNGO, Mango Market’s native token), thereby holding both long and short positions. He then manipulated the market price of MNGO by buying large quantities of MNGO on various exchanges (including AscendEX), artificially driving up its price and the value of his long position. Eisenberg used this inflated long position as collateral for a loan from Mango Markets—and then, minutes after obtaining the loan, he sold MNGO on the same exchanges causing a crash in MNGO’s price, which increased the value of his short position. Eisenberg then borrowed more digital assets from Mango Markets against his short position before disappearing with the borrowed funds. In total, Eisenberg borrowed over $100 million in cryptocurrency from Mango Markets.
Following a trial in which an SDNY jury convicted Eisenberg of commodities fraud, commodities manipulation, and wire fraud, the District Court granted Eisenberg’s Rule 29 motion for judgment of acquittal. First, the Court found that the government had not established venue as it failed to show that an essential part of the commodities offenses occurred in SDNY. The government asserted two arguments to establish venue: (1) that HD Consulting—a vendor working for the AscendEX exchange that Eisenberg used to manipulate MNGO’s price—had personnel in Manhattan who helped identify Eisenberg’s market manipulation, and (2) a Mango Markets investor in Poughkeepsie, New York, tried to withdraw MNGO unsuccessfully based on the false price signal created by Eisenberg’s activity. Judge Subramanian found that neither AxcentEX’s detection of Eisenberg’s conduct nor the false price signal that led to the investor’s failed attempt to withdraw MNGO in SDNY was an “essential conduct element[]” of Eisenberg’s crimes, which is required to establish venue.
Second, the Court overturned Eisenberg’s wire fraud conviction for a lack of venue and a lack of material misrepresentation. In addition to the venue shortcomings discussed above, the Court found insufficient evidence of “falsity” because Mango Markets had “no rules, instructions, or prohibitions about borrowing,” no rules regulating manipulation on the platform, no formal requirement that a Mango Markets borrower had an obligation to repay, and no requirement that a borrower’s account maintain sufficient collateral. Thus, while Eisenberg had manipulated the price of MNGO in order to obtain margin loans from Mango Markets based on his artificially inflated long and short positions, he had not made any materially false statements to Mango Markets in order to secure the loans.
This Eisenberg decision shows the challenges prosecutors face in applying traditional criminal laws to the crypto industry. Many of the theories that prosecutors have used to establish venue in market manipulation cases (particularly in SDNY) are unsuited to decentralized financial activity that does not rely on the traditional fiat banking industry infrastructure. Moreover, nascent digital currency companies willing to allow margin trading may lack the standardized terms and conditions of established financial institutions that prosecutors use to support wire-fraud charges. Individuals and companies in the crypto industry should be mindful of the unique nature of this emerging industry and the differences from traditional finance that might undermine potential criminal charges relating to market manipulation.
