DeFi Trader Avi Eisenberg Is Stuck in US Custody. Here’s How He Got There.

If found guilty, Eisenberg would go down as the first US citizen convicted for exploiting a DeFi platform

article-image

INelson/Shutterstock modified by Blockworks

share

Once high-flying crypto trader Avraham “Avi” Eisenberg has been confined to a Puerto Rican jail for the foreseeable future — capping off a rapid fall to what by most appearances had been a remarkable rise. 

US prosecutors have deemed Eisenberg responsible for financial fraud and market manipulation in relation to an October 2022 attack on Mango Markets, a DeFi trading platform built on the Solana blockchain. It resulted in an initial loss of at least $112 million of cryptoassets. 

Digital asset traders have been keeping a close eye on the case, especially considering Mango’s native token (MNGO) has plummeted some 48% since the exploit. It’s now trading around two cents. Still, MNGO bulls have toured the resilience of the token, especially in the aftermath of FTX’s collapse that sent virtually all cryptocurrencies reeling. 

That, coupled with other macro forces, has likewise applied downward pressure to MNGO, plus other DeFi assets — in addition to Eisenberg’s alleged misconduct.

Here’s a look at how Eisenberg got here via a timeline of consequential events outlining his attempts to reverse his “highly profitable trading strategy” — and how he wound up in the crosshairs of US prosecutors. 

New court documents dubs Eisenberg flight risk 

A court document issued Wednesday signed off on by the judge overseeing the case grants prosecutors’ request to keep Eisenberg behind bars, where he’s set to remain under the custody of the US Attorney General. 

Their rationale: he’s subject to a lengthy incarceration if convicted and has significant family ties outside the US.

US Magistrate Bruce J. McGiverin, who issued the order, agreed with prosecutors in saying the reasoning behind Eisenberg’s continued custody is strongly tied to upwards of $40 million of outstanding digital assets. The missing funds, plus his dual citizenship, offers both the means and motivation to flee the country, the order says. 

Eisenberg ousts himself

The fast-developing case against the self-styled “game theorist” largely stems from the Mango manipulation last year. 

Eisenberg later admits responsibility by orchestrating a complex attack that acted on the spot price of Mango’s token to drive up his own holdings. He then is said to have taken out lines of credit collateralized by that value — before exiting the protocol altogether.

Following the Oct. 12 exploit, Eisenberg comes forward a week later claiming to be part of a group that drained Mango’s funds. On Twitter, Eisenberg attempts to justify their actions as “legal,” because they had used the protocol “as designed.”

Loading Tweet..

Of the $112 million taken, Eisenberg returns $67 million in various digital assets, which is later voted on as a refund split by Mango’s decentralized autonomous organization.

Prosecutors come a-knockin’

Shortly after the holidays, Eisenberg is charged with commodities fraud and market manipulation by US prosecutors from the Southern District of New York and is arrested in Puerto Rico.

In a Dec. 19 complaint, prosecutors allege Eisenberg willfully and knowingly attempted to manipulate and defraud markets, enabling him to withdraw millions in multiple cryptocurrencies with no intention of returning them.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
  • Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
Tags

Upcoming Events

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

tg trading bot report graphic.png

Research

Telegram trading bots have found their primary niche in highly speculative token launches and retail-dominated memecoin markets, with many features specifically tailored to token sniping and copy-trading strategies.

article-image

Paradigm’s Charlie Noyes thinks that the attention on stablecoins is well-deserved after Mesh’s $82 million round

article-image

Crypto may benefit from developments during the second quarter after a rough start to the year

article-image

With a friendlier regulatory outlook and the airdrop flow being stemmed, some are looking to how new native tokens can become valuable assets

article-image

The recent action paints an uncertain picture for future monetary policy moves

article-image

Is the finance world becoming “more liquid”? Experts give their takes as TradFi players consider new moves