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By Matthew Russell Lee, Patreon Maxwell Book

SDNY COURTROOM, April 10 -  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 28 there was the final pre-trial conference, and Inner City Press went, here:

OK - now in criminal crypto case of US v Avi Eisenberg, at final pre-trial conference. He was brought in by US Marshals

Judge: What about they Touhy request?

Defense: The Government only gave us their objections yesterday... They are trying to use our client's tweets against him. AUSA: We have been making nightly disclosures of 3500 material

There was some back and forth on logistical issues - will Eisenberg come forward to sidebars with the judge? Defense: No, that would be a circus [the Marshals would go up with him, highlighting that despite the suit he is in detention].

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

On March 27, one of Eisenberg's counsel wrote in supporting his subpoena of Mango Markets founders Dafydd Durairaj and Max Schneider, noting that Durairaj "is expected to be a critical government witness."

On April 8, just before 5 pm, the 12 jurors and 3 alternates were selected. Inner City Press was there, observing from the gallery as Eisenberg whispered in the ear of one then another of his five lawyers, going over exhibits of text messages on the laptop before him. Judge Subramanian approved the defense's request to bring their client snacks, but deferred judgment on a number of exhibits.

On April 9 the trial began in earnest. Here were the opening arguments, thread.

On April 10, US expert witness Jain got grilled, amid more serious talk of DeFi, thread:

OK - in crypto trial of US v Avi Eisenberg, DOJ expert Kapil Jain is being cross examined about owing Wells Fargo $20,000.

Avi Eisenberg's lawyer: Isn't it true you own back taxes in North Carolina? Jain: I'm not sure of that - I'm prepared to talk about the subject of this case -- Eisenberg's lawyer: I move to enter certified records into evidence. AUSA: Objection! Whispered sidebar

Now with jury and witness Kapil Jain out of the courtroom AUSA: If he doesn't remember, how would showing him the tax records go to his [alleged] bias? Eisenberg's lawyer: The jury should be permitted to know there is countervailing evidence -

Judge: If it's about bias, I'd let it in. But this goes to character. Eisenberg's lawyer: I thought he would acknowledge them. He owes money, so he does government jobs. Judge: I don't know if you need the documents to be in evidence. If he says he's not aware...

 Judge: The government says these are not certified records. Eisenberg's lawyer: Some are certified. Judge: Why don't you continue with the questioning, and we'll deal with the documents later? Eisenberg's lawyer: I'll point out his address in Palo Alto

AUSA: I don't think any of these should come in. Judge: Reprise that objection if and when. Bring the jury back in, after Mr. Jain. Jury entering! Eisenberg's lawyer: Does this refresh your memory you owe $90,000 in back taxes in NC? Jain: It says that.

Eisenberg's lawyer: Do you deny it? Jain: These are the first time I'm seeing this. I'll take them to my accountant. Judge: Do they refresh your recollection? Jain: No. Because I'm seeing them for the first time.

Eisenberg's lawyer: No further questions. Judge: Re-direct. AUSA: Had you seen any of these records before today? Jain: No.

More cross examination: Eisenberg's lawyer: Is this the order book for Mango perpetuals? Witness: Yes. It's in the Mango smart contract. Eisenberg's lawyer: It's a public document that anyone can see, right? Witness: Yes.

Eisenberg's lawyer: If I put $5 million on the Mango Markets then I pull it out, that's not a borrow, is it? Witness: No it is not. Eisenberg's lawyer: While we wait, as far as the withdrawals that we see here, it is permitted by the smart contract? A: Yes.

 Eisenberg's lawyer: After the incident, there was a lot of discussion on the Discord, right? Witness: Yes... Eisenberg's lawyer:  It doesn't know to ask who is on which side of a trade, right? Witness: That doesn't make sense, it's on a blockchain

Witness: I don't know what you mean, "know to ask," that not how a smart contract works. Eisenberg's lawyer: You were compensated in Mango coins? A: Yes. 100 million. Eisenberg's lawyer: You were hoping they'd be valuable? A: That would have been nice

 Judge: Next government witness. AUSA: The government calls Chris Hermida. [Witness takes the stand] AUSA: Mr. Hermida, where to you work? Hermida: Switchboard Technology Labs. AUSA: What is this: Hermida: Our home page. It says, supercharge your Web3

 AUSA: Were you involved in working on the Mango perpetual oracle? Hermida: Yes. On FTX, it was the MNGO - USD pair. On another platform, we used Tether, normalized to USDT, to ensure uniformity. AUSA: On the day in question, what happened? Hermida: I got pings...

 Hermida: The price had risen from 4 cents to 45 cents. It was an insane outlier, especially for the size of the Mango market at the time. We convened in a war room, with the Mango team. We checked our Oracle network, and our nodes

 AUSA: No further questions. Judge: Cross examination. Eisenberg's lawyer: The oracle for Mango perpetuals included FTX, Serum and Cindex? Hermida: Yes. 

Eisenberg's lawyer: Switchboard runs on smart contracts? Hermida: Yes. There's also an off-chain component.  Eisenberg's lawyer: This was open source? Witness Hermida: I'm not sure. I can get back to you. [That's not how trials work]

Judge (to jurors) We are making such great progress we are going to knock off for the day. Don't even eat mango (laughter in the courtroom). All rise for the jury!

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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