Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.
NEW YORK – To federal prosecutors, Avi Eisenberg's $110 million crypto trade on Mango Markets put a digital twist on an old scam. But to the DeFi trader's defense team, it was a legitimate windfall from the risky world of crypto, where finance's old rules don't apply.
He did so by making a massive bet on the future price of MNGO tokens and then allegedly gaming the crypto markets to drive up their value. Once the token was up over 1,000% he borrowed against their inflated value to capture virtually all of the crypto on MNGO, rendering it insolvent. Assistant U.S. Attorney Tian Huang kicked off the government's case by comparing Eisenberg's"scam" to a con artist who lures his victim into loaning him money by offering a"beautiful, fake diamond ring" as collateral.
Eisenberg's five-person trial team hinted they intend to use crypto's nascent state and cloudy regulatory status to their advantage. In his opening statement, Sanford Talkin said the government"is not going to get out of the gate" in its attempts to apply commodities rules to highly speculative tokens, like MNGO.
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Crypto Trader Avi Eisenberg's Fraud Trial BeginsThe criminal fraud and manipulation trial of crypto trader Avi Eisenberg is set to begin, as a 15-person jury has been seated. The trial will determine whether Eisenberg broke the law with a trading strategy that caused significant damage to Mango Markets, a popular cryptocurrency betting venue on the Solana blockchain. This trial highlights the government's efforts to regulate decentralized finance (DeFi) in the crypto trading space.
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