Mango Markets exploiter Avi Eisenberg sentenced to four years on child exploitation material charge

Crypto trader Avraham “Avi” Eisenberg was sentenced to four years and four months in prison Thursday for possession of child sexual abuse material.

But a federal judge said he needs more time to consider Avraham’s request for a new trial for his October 2022 exploit of now-defunct, Solana-based decentralised exchange Mango Markets.

A federal jury convicted Eisenberg, 29, of fraud and market manipulation in April of last year for the $110 million exploit.

Eisenberg exploited a flaw in Mango Markets’ design: by trading with himself to inflate the value of the protocol’s token, MNGO, he was able to use MNGO perpetuals as collateral to borrow crypto worth about $110 million from the protocol’s users with “no intention of repaying them,” according to prosecutors.

But Eisenberg’s attorneys promptly requested an acquittal or a new trial.

The government failed to prove that Eisenberg ever committed a crime in the Southern District of New York, where he was tried; that MNGO tokens were commodities; that he manipulated the price of MNGO perpetuals; that he defrauded Mango Markets; and that he had used an interstate wire, Eisenberg’s attorneys said.

On Thursday, Judge Arun Subramanian said there was a “non-zero chance” he would grant Eisenberg’s request, but added he would still sentence Eisenberg for his possession of child sexual abuse material.

Shortly before the trial last year, Eisenberg pleaded guilty to possession of more than 1,200 images and videos of child sexual abuse, which federal agents had found on his computer when he was arrested in December 2022.

While Eisenberg never created or distributed such material, his possession “creates a market for these types of materials that otherwise wouldn’t exist,” a prosecutor said Thursday.

Eisenberg’s attorney, Sanford Talkin, attributed Eisenberg’s possession of the material to his upbringing in an ultra-orthodox Jewish community in Rockland County, New York, which left him with “a repression, an immaturity, and a lack of understanding of many things regarding sex.”

Talkin also implied Eisenberg had been abused himself as a child, citing “at least two situations” in which Eisenberg was the “recipient of unthinkable activity.”

In a letter to Subramanian, Eisenberg said he has since come to realize he shared responsibility for the victim’s abuse, even if he wasn’t creating or sharing images of that abuse.

His attorneys requested a sentence of three years for his possession of child sexual abuse material. Prosecutors had requested a combined sentence of six and a half to eight years for his possession of that material and for his exploitation of Mango Markets.

In a statement before he delivered Eisenberg’s sentence, Subramanian noted Eisenberg’s upbringing, autism diagnosis, and “significant psychological trauma.”

But courts levy an average sentence of about four years for possession of child sexual abuse material, the judge noted.

Moreover, some of the images and videos found on Eisenberg’s computer were particularly horrifying, such as those depicting children younger than two years of age.

In addition to his four years and four months imprisonment, Eisenberg will serve five years of supervised release, the judge said.

Aleks Gilbert is a DeFi Correspondent with DL News. Got a tip? Email him at aleks@dlnews.com.