“ Code is law ” has just won in court in victory for deffi – dl news

A version of this article appeared in our The decentralized Newsletter on May 27. Register here.

The idea that “Code is the law” has just won in court.

Avraham “AVI” Eisenberg, who operated the mango market protocol based in Solana in 2022, was sentenced to more than four years in prison last month for possession of sexual children’s abuse equipment.

But Eisenberg was also supposed to be convicted that day to defraud the mango markets.

Prosecutors had asked for a combined sentence of up to eight years for children’s sexual abuse equipment and accusations of fraud.

He had pleaded guilty to the first and fought the latter during a trial in 2024.

A jury judged Eisenberg, 29, guilty of fraud.

But he asked for a new trial, arguing that the government had not proven that he had already committed a crime in the South District of New York, where he was tried.

The government had not proven that the MNngo tokens were basic products; that Eisenberg has manipulated the price of perpetual mngo; that he has defrauded the mango markets; And that he had used an interstate wire, said his lawyers.

During his condemnation hearing, judge Arun Subramanian said that there was a “no zero chance” that he would grant the request for Eisenberg.

On May 23, it was granted.

The judge canceled Eisenberg’s convictions on the accusations of fraud and manipulation of raw materials and acquitted Eisenberg of his accusations of wire fraud.

Indeed, the government had not proven that Eisenberg had committed a crime in the South District of New York, wrote the judge in a 35 -page order last week.

More interestingly, however, the judge also declared that Eisenberg could not have fraud Mango, a protocol of executing, because he had simply benefited from a defect in his design, and the service had no terms that prohibited his behavior.

Eisenberg has exploited a flaw in the design of the mango markets by exchanging with itself to inflate the value of the protocol token, Mngo.

The prosecutors say that he was then able to use Mngo Perpetuals as a guarantee to borrow the crypto worth around $ 110 million from the protocol users without “no intention to reimburse them”.

“There was no evidence at the trial that the mango markets demanded that any user promises that he reimburses funds as a borrowing condition against his assets, so this is not a case where” a contractual promise was made “,” wrote the judge.

In addition, “there was no evidence that the function” borrow “on the mango markets involved an obligation to reimburse – or any other obligation elsewhere – even if the term is conventionally understood.”

The judge continued:

“In other contexts, a contractual agreement to” borrow “could give rise to a complaint for fraud if a person intentionally distorts or omits something relevant under the agreement or negotiations of the parties.”

Here, however, “there was neither terms nor negotiations. There was only the word “borrow”. This word could have been “access to guarantees”, “use assets”, or something else elsewhere “.

The government argues that by pressing the “borrow” button, Eisenberg essentially “created the false impression that its guarantee was precious”.

This does not check, according to the judge.

“As Eisenberg points out, the platform has automatically measured the real value of its guarantee, so it has represented anything wrong.”

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