By Matthew Russell Lee, Patreon Maxwell Book
SDNY COURTROOM, March 27 - 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
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."
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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