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In a pivotal legal development, U.S. District Judge Arun Subramanian has raised the possibility of granting a motion for acquittal or a new trial in the case involving Avraham Eisenberg, the former Puerto Rican crypto trader accused of defrauding Mango Markets investors of $110 million. The motion centers on allegations that Eisenberg manipulated the price of the exchange’s native token, MNGO, and used derivatives to withdraw millions from the decentralized crypto exchange.

Judge Subramanian delayed sentencing in the case, citing the need for further review of Eisenberg’s motion. In a rare move, he suggested that he may grant the motion in whole or in part but stated that additional time is required to reach a final decision.

“The chance is not negligible that I will grant the motion, either in part or in full, but more time is needed,” said Judge Subramanian during a hearing on Thursday. The judge also alluded to possible complications involving mixed swaps or the case's venue, which are expected to be addressed in additional briefs.

Eisenberg, 29, faces charges including commodities fraud, wire fraud, and commodities manipulation related to his role in inflating the price of MNGO. The prosecution claims that Eisenberg used perpetual futures contracts, borrowed and withdrew $110 million in crypto assets from Mango Markets, and manipulated MNGO's value to facilitate the fraud. The alleged scheme severely impacted the platform, which nearly collapsed following Eisenberg’s actions.

In addition to the crypto-related charges, Eisenberg has been sentenced to over four years for possessing child pornography found on his electronic devices during his arrest in late December 2022. A separate sentencing date for the remaining charges has not yet been set.

During the hearing, Eisenberg's defense argued that the MNGO perpetuals used in the trades should not be classified as swaps and that the government had not proven the transactions met the necessary legal criteria. The defense maintains that Eisenberg's actions were part of a legal trading strategy involving his own funds and followed the terms of the smart contracts governing Mango Markets.

In the aftermath of the alleged incident, Eisenberg publicly acknowledged his involvement in the scheme but insisted that he believed the actions were lawful. He later returned $67 million to Mango Markets in a deal contingent upon the exchange’s token holders agreeing to waive any claims or criminal charges.

The court has also considered the issue of venue, with Eisenberg’s attorneys arguing that the government failed to connect the trading activities to the Southern District of New York. Prosecutors countered that the scheme was carried out through a trading platform, AscendEx, which operates in Manhattan.

Eisenberg remains in custody without bail, and the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have both filed civil enforcement actions against him. These actions are currently on hold pending the resolution of the criminal case.

The case, U.S. v. Eisenberg (Case No. 1:23-cr-00010), is being heard in the U.S. District Court for the Southern District of New York.