A US federal court has annulled fraud charges against Avraham Eisenberg, the trader implicated in the 2022 $110 million Mango Markets exploit. The ruling, delivered on May 24, 2025, found insufficient evidence of fraudulent activity, emphasizing the permissionless and automatic nature of the Mango Markets platform. This decision marks a significant legal precedent for cases involving decentralized finance (DeFi), highlighting the complexities of prosecuting fraud within decentralized and automated systems.
Judge Arun Subramanian stated that the evidence did not prove falsity or deceit in Eisenberg's actions, noting that Mango Markets functioned in a permissionless manner without fraudulent operation. This judgment comes amid ongoing civil suits against Eisenberg by the SEC and CFTC, which remain unresolved.
Market reactions to the court's ruling have been subdued, with no significant impact on Mango Markets or its affiliated tokens. The ruling raises important regulatory questions about how permissionless DeFi platforms are treated under current financial laws and could shape future regulatory frameworks and legal approaches to DeFi exploits. Experts consider the decision a landmark moment, underscoring the challenges regulators face in addressing decentralized, automated financial innovations.