For
Crypto Defendant Avi Eisenberg Trial After
Code Is Law Arguments now Ruling on
Motions
By Matthew
Russell Lee, Patreon Maxwell
Book
SDNY COURTROOM,
March 19 - In the U.S.
District Court for the
Southern District of New York
on December 27, 2022 a
complaint was ordered unsealed
charging Avraham Eisenberg
with commodities fraud. He was
arrested in Puerto Rico.
Inner City Press
is covering the case(s), often
as the only media in the Mag
Court. Related
Mag Court live-tweeted
thread (more on Patreon
here)
vlog here
On January 9,
Inner City Press came across
the CFTC case against
Eisenberg, just filed (still
with no title in PACER) and
put it out on Patreon here.
The 21-page civil complaint
is, as is often the case, more
detailed...
On April
12, the US Attorney's Office
filed a motion to intervene
and stay the Mango Labs v.
Eisenberg case, saying that
neither side opposed the stay.
The US seeks a "full stay
until the conclusion of the
parallel criminal case."
More
on Substack here.
On June 14, Judge
Berman held a proceeding to
pick a trial date. Inner City
Press covered it, thread here.
On July 27
Eisenberg moved to dismiss and
to suppress; he submitted a
7-page affadavit including "In
the evening of December 26,
2022, I arrived by airplane at
The Luis Munoz Marin
International Airport in
Carolina, Puerto Rico, just
outside of San Juan. 3. I
disembarked the airplane with
my luggage, a backpack and a
suitcase. 4. I walked to the
United States Customs counter.
There, I was questioned by a
United States Customs and
Border Protection ("CBP")
agent regarding the purpose of
the trip I had just completed
and general questions about
the contents of my luggage. 5.
The CBP agent directed me to a
specific area several feet
away from the Customs counter
for additional questioning,
and there another CBP officer
opened the suitcase and
backpack. I recall the agent
pulling out the laptop and
asking me to turn it on" -
full affidavit on Patreon here.
Watch this site.
The
complaint is on Patreon here
On February 3,
Eisenberg in a yellow jump
suit and feet shackled was
brought into Magistrates Court
at SDNY. He had, at least for
the proceeding, the same
lawyer Ethereum developer
Virgil Griffith had in the
North Korea sanctions case he
pled guilty in: Brian Klein.
His
parents were in the gallery
and he looked at them, from
two rows away. The prosecutor
said that (unlike on Sam
Bankman-Fried) they were
seeking detention, and that he
was consenting at least for
now. Here is Inner City
Press' thread.
There's more
detail on Patreon here.
On February 14,
there was a very brief
arraignment, thread here
On November 2,
2023 Eisenberg's counsel wrote
it seeking to push the
December 4 trial to March or
April. They said Eisenberg was
moved from Essex to the MDC,
and not allowed to bring his
discovery material with him.
The SDNY prosecutors
acknowledge that's a problem,
but want only a one-week delay
to December 11 - or to April,
citing an unrelated murder
trial.
On November 3, it
was moved to April 2024. And
on November 21, Judge Amit
Subramanian set out questions
to be answered in early
December, including "Whether
any transaction involving
USDC, even where it is used as
a medium of exchange to
purchase something that is not
a commodity, is nevertheless a
“contract of sale of any
commodity” given the statutory
and regulatory definitions
(see Dkt. 37 at 5-6);
Whether the indictment alleges
manipulation as to the price
of USDC, deceptive conduct
affecting the USDC market, or
deceptive conduct otherwise
“in connection with” a
contract of sale of USDC (see
Dkt. 37 at 7–8); Whether
the indictment alleges a
manipulative device “in
connection with . . . any
swap” where Eisenberg was the
party on both ends of the MNGO
Perpetuals" - full order and
questions on Patreon here.
On March 14,
2024, there was a hearing on
motions in limine and experts.
Inner City Press live tweeted
here
AUSA: We're
getting toward a "code is law"
inference...Question as to
terms of service, in defi, who
the duty is between... They
will be arguing Mango Markets
should have seen this coming
Eisenberg's lawyer: What he
did was not criminal.
On March 19,
Judge Subramanian ruled:
"ORDER & OPINION as to
Avraham Eisenberg. For the
reasons stated above and on
the record at the March 14,
2024 hearing, Eisenberg's
motion to preclude Mr. Jain's
rebuttal opinion is DENIED
without prejudice as to Mr.
Jain's first rebuttal opinion
and GRANTED as to Mr. Jain's
second rebuttal opinion. The
Government's motions are
DENIED insofar as they seek to
exclude Mr. Sheridan or Dr.
Montgomery from testifying.
But Mr. Sheridan's testimony
is limited as explained above.
In addition, as addressed at
the hearing and based on the
understandings and
representations made by
counsel at the hearing, the
experts will not be permitted
to offer the following
testimony at trial: Testimony
suggesting that Mango Markets
protocol designers had a
certain intent (such as to
permit or prohibit certain
conduct or trades); Testimony
suggesting that USDC was
designed for a certain
purpose; Testimony that
Eisenberg "strategically
utilized" Mango Markets'
mechanics or code; Testimony
that Eisenberg or any other
traders had a certain intent
(e.g., by stating that
Eisenberg's conduct "brought
to light," "exposed," or
"highlighted"
vulnerabilities); Testimony
suggesting that Eisenberg's
conduct was lawful because it
was permitted by Mango
Markets' system or protocols,
or because of the lack of
terms of service; Testimony
that offers a definition of
"swap" other than the one
given in the CEA; Testimony as
to whether MNGO perpetuals are
similar to or different than
"conventional" or
"traditional" swaps. If the
Government opens the door by
Mr. Jain comparing MNGO
perpetuals to traditional or
conventional swaps, then
Eisenberg's experts will be
allowed to respond in kind;
and Testimony describing
market activity as "natural"
or a price as "artificial."
The Clerk of Court is directed
to terminate the motions at
Dkts. 80, 90, and 91. (Signed
by Judge Arun Subramanian on
3/19/2024)."
We will continue
to cover the case.
In a parallel
civil case, on February 24,
2023 there was an hour and a
half argument in Mango Labs v.
Eisenberg before Judge Lewis
J. Liman. Inner City Press
live tweeted...
Ultimately
Judge Liman extended the TRO
for two weeks, after for two
letters by Tuesday, and said
he will rule on March 10.
On March 10,
Inner City Press was there,
thread here
More with
analysis on Substack here
Watch this site.
Inner City Press
will have more on these cases.
The criminal case
is US v. Eisenberg, 23-cr-10
(Subramanian)
The stayed CFTC
case is Communities Futures
Trading Commission v.
Eisenberg, 23-cv-173
(Schofield)
The Mango Labbs
civil case is Mango Labs, LLC
v. Eisenberg, 23-cv-665
(Liman)
***
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