The recent decision in United States v. Avraham
Eisenberg is making waves in cryptocurrency circles, and
highlights the evolving legal challenges posed by decentralized
finance (DeFi) platforms.1
After a jury delivered a guilty verdict, Eisenberg appealed. On
appeal, the U.S. District Court for the Southern District of New
York vacated Eisenberg's convictions for (1)
commodities-fraud; (2) commodities manipulation, and
acquitted Eisenberg on the (3) wire fraud charge.
For a full summary of the facts, view our blog post here.
The vacated convictions were set aside on the basis that New
York was not the proper venue since Eisenberg executed his trades
from Puerto Rico, and the government failed to show a sufficient
connection to New York. As for the wire fraud acquittal, the Court
found that the automated nature of Mango Markets' smart
contract meant that Eisenberg could not have made "false
representations" to influence the contract and thereby cause
the loss.
