Coin Edition -
- A 15-person jury will begin trial on Tuesday in Avi Eisenberg’s fraud and manipulation case.
- According to reports, the trial is expected to run for two weeks.
- Users think the trial would enable the government to increase policing of the DeFi sector.
A 15-person jury will begin trial on the criminal fraud and manipulation involving Avi Eisenberg on Tuesday, April 9, 2024. According to reports, the trial is expected to run for two weeks to determine whether Eisenberg broke the law in 2022 by deploying a self-described “highly profitable trading strategy.”
The trader’s strategy reportedly crippled Mango Markets, the once popular venue for betting on cryptocurrencies on the Solana blockchain. Notably, Eisenberg’s trial could represent a significant moment in the decentralized finance (DeFi) evolution, with users suspecting it could substantiate or twist the existing notion that “code is law.”
With the trial, the government could find the opportunity to interfere in the DeFi sector, enabling the policing of processes within the supposedly independent industry. It is a sector of the financial industry, mainly governed by smart contracts.
The basis of Eisenberg’s case is the allegation that he manipulated the price of the Mango (MNGO) token, allowing him to borrow all of Mango’s deposits against his position. Mango’s backers accused the trader of illegally gaming Mango Market’s futures contracts.
Meanwhile, Eisenberg’s self-described “highly profitable trading strategy” allowed him to walk away with $110 million in cryptocurrencies. The amount comprised other people’s deposits on the platform. However, he later returned part of the funds based on an agreement that Mango backers would not prosecute him.
Recent developments show that Mango’s backers failed to uphold the agreement and have taken Eisenberg to court. In court on Monday, prosecutors and defense teased upcoming testimony from Mango’s founder, Dafydd Durairaj.
According to prosecutors, Durairaj spoke with a ransomware negotiator in the wake of the trade. Hence, Mango’s backers considered the agreement a hostage situation rather than a deal between both parties.
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