A trader jailed for stealing $110 million from the Mango Market exchange will face a criminal trial this week that will test the scope of America's cryptocurrency crackdown. From the report: Prosecutors indicted Abraham Eisenberg on October 11, 2022, for manipulating Mango Market futures contracts to increase swap prices by 1,300% in 20 minutes. He then “borrowed” from the exchange for the increased prices on those contracts, an act the government claims is theft. Jury selection begins Monday in the New York federal court where the landmark cryptocurrency case unfolded. FTX co-founder Sam Bankman Fried was sentenced to 25 years in prison last month for orchestrating a multibillion-dollar scheme. On Friday, he and co-founder Do Kwon were found guilty of fraud in a civil trial over the company's 2022 bankruptcy that wiped out $40 billion in investor assets.
Eisenberg, who calls himself an “applied game theorist,” insists his actions were not theft at all. Rather, he says, he legitimately exploited weaknesses in decentralized finance applications. The trial appears to be the first time a U.S. criminal jury will consider what types of DeFi transactions are legal. In the world of cryptocurrencies, where digital blockchains govern who owns what, virtual ecosystems are built on the concept that “code is law.” This means that if something is not explicitly prohibited in a crypto platform's terms, the government cannot intervene. But prosecutors argue that these rules do not protect traders from possible criminal charges for market manipulation and fraud.