Judge Dismisses Wire Fraud Charges Against Mango Markets Exploiter Avi Eisenberg

A federal judge has dismissed wire fraud charges against Avi Eisenberg, the trader who exploited Mango Markets in a controversial $110 million DeFi heist. Eisenberg had manipulated the price of Mango’s native token, MNGO, using a series of large trades that inflated its value by over 1,000% within just 20 minutes. He then used the overvalued tokens as collateral to borrow and withdraw millions in crypto assets from the platform.

Prosecutors argued that Eisenberg knowingly misled the protocol, but the judge ruled that Mango Markets’ permissionless and smart contract-based structure failed to support claims of deception. The court found insufficient evidence to prove that Eisenberg made false representations, siding with his defense that the exploit was a legal loophole rather than a criminal act.

Eisenberg’s legal team, led by Brian Klein of Waymaker LLP, emphasized that the protocol was open to anyone and that no false statements were made. “From the beginning, we said this case was fatally flawed,” Klein stated after the ruling. “We are very pleased for Avi that the judge granted our motion and dismissed the case.”

Although Eisenberg avoided conviction in this high-profile crypto fraud case, he remains in prison. In a separate legal matter, he is currently serving a four-year sentence after pleading guilty to the possession of child sexual abuse material, a charge unrelated to the Mango Markets incident.

The Mango Markets case has sparked widespread debate in the crypto community over the legal boundaries of DeFi exploits, highlighting the challenges in regulating decentralized platforms where smart contracts govern transactions without intermediaries. Eisenberg’s acquittal may set a precedent for how courts interpret manipulation and fraud in decentralized finance ecosystems.