A U.S. federal judge has overturned the fraud and market manipulation convictions of Avraham Eisenberg, the trader accused of exploiting decentralized exchange Mango Markets for $110 million. Judge Arun Subramanian ruled the evidence didn’t prove Eisenberg made any false statements or illegal moves under current laws.

Eisenberg was previously convicted in 2024 for manipulating Mango’s MNGO token, inflating its price by over 1,300% in minutes, then using those gains to withdraw crypto funds. Prosecutors claimed this constituted fraud. But Eisenberg’s defense argued he simply took advantage of Mango’s permissionless smart contract system — no deceit involved.

The judge agreed, stating Mango Markets’ open, automatic nature meant there was “insufficient evidence of falsity.” The ruling also tossed a third charge and dismissed the idea that New York was the right place to try the case, noting Eisenberg acted from Puerto Rico and no core activity happened in New York.

While this ruling weakens the Department of Justice’s crypto crackdown, Eisenberg still faces civil lawsuits from the SEC and CFTC. Additionally, he remains imprisoned — but not for Mango Markets.

In a separate case, Eisenberg pleaded guilty to possessing child pornography, leading to a nearly four-year prison sentence on May 1. The charge arose from digital evidence found during his arrest in Puerto Rico in 2022.

Though Eisenberg is legally cleared in one of the most controversial DeFi cases to date, his legal troubles are far from over — and his story continues to send shockwaves through the crypto industry.