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In the criminal justice system, there’s an interesting distinction between crimes and “bad acts.” Crimes include acts like murder and robbery for which we send people to prison, while bad acts describe things that are, well, bad but not against the law. Think of stuff like standing up someone for a date or laughing at someone who has taken a bad fall, or any number of things that are mean or cruel but that are not against the law. This brings us to a certain Avraham Eisenberg, who did some very bad things in the crypto world but, in response to his fraud trial that started on Monday, says he committed no crime.

Eisenberg, in addition to being a colossal scumbag, excels at math and game theory. Instead of using those talents to teach young people or propose a more just system of taxation or whatever, he sought to get rich in decentralized finance—an unforgiving world where the rules are defined entirely by algorithm, and where self-described “degens” typically trade under pseudonyms. In Eisenberg’s case, he picked a niche DeFi platform called Mango Markets and, using a pair of futures accounts, traded with himself to drive up the price of the obscure MNGO token, which he had acquired.

After Eisenberg’s shifty dealings caused the price of MNGO to soar exponentially in 20 minutes, he used a feature of Mango Markets that let traders borrow against their recorded gains. Even though his MNGO wealth was illusory, Eisenberg was able to borrow to the tune of $110 million, which he promptly cashed out—draining all funds from the platform and leaving other customers holding the bag. He followed this up by congratulating himself on Twitter for a highly successful trade, and negotiating a settlement that saw him return $67 million in return for a promise that Mango Market wouldn’t sue or press charges.

Unsurprisingly, this arrangement did not go over well with the Justice Department, which rang up Eisenberg on fraud charges. But this is where things get interesting. Eisenberg, in response to the charges, is claiming not that he didn’t do all these things, but rather that what he did was bad but not a crime. He had operated within the rules of Mango Markets’ algorithms and, under the norms of degen culture, he had won fair and square. Or, in the immortal words of The Wire, Eisenberg is saying “It’s all in the game.”

It’s a clever argument and comes in a case that will set a precedent for how the U.S. legal system handles the world of DeFi, which has until now operated under laws of its own. My guess is that the court—which has already rejected Eisenberg’s request to dismiss the case outright—isn’t going to go for this. The feds have charged Eisenberg with three flavors of fraud, including commodities manipulation and wire fraud, which presumably can be stretched to include his Mango shenanigans. And it doesn’t help that Eisenberg, like Sam Bankman-Fried, is a smart but deeply unsympathetic defendant. That’s the thing about bad acts—do enough of them and sooner or later you’ll probably find you’ve committed a crime.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

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