Crypto Trader Eisenberg's $110M Fraud Trial Puts DeFi Under Legal Scrutiny

Avi Eisenberg, a crypto trader, is facing trial for criminal fraud and manipulation, accused of deploying a trading strategy in October 2022 that allegedly caused significant losses for Mango Markets, a cryptocurrency platform on the Solana blockchain. Eisenberg is accused of manipulating the price of the MNGO token and borrowing a substantial portion of Mango's deposits, resulting in a $110 million profit. The trial, expected to last two weeks, is significant as it represents the government's attempt to police crimes in the decentralised finance (DeFi) sector, challenging the notion that "code is law." This case marks the first federal criminal trial involving a DeFi trader accused of breaking U.S. law, presenting complex philosophical and practical questions about trading tokens on permissionless blockchains. The trial also involves debates over legal concepts, such as manipulation, and the obligations of traders operating on platforms like Mango Markets.