Two former Deutsche Bank traders win their appeal in a Libor manipulation case.

The decade-long pursuit of holding Wall Street accountable for trying to manipulate Libor, the once-prominent interest rate benchmark, suffered another blow Thursday when a federal appeals court overturned the convictions of two former Deutsche Bank traders.

A three-judge panel for the U.S. Court of Appeals for the Second Circuit in New York said federal prosecutors had failed to provide sufficient evidence to support the 2018 convictions of Matthew Connolly and Gavin Black on fraud and conspiracy charges.

The unanimous ruling is the latest in a series of defeats for prosecutors in the United States and Britain, as more than a dozen traders have been acquitted at trial or had their convictions overturned. In 2017, another appellate panel from the Second Circuit tossed out the Libor manipulation convictions of two former Rabobank traders.

The convictions of some traders who took guilty pleas still stand. But the latest ruling is another indication of the difficulty prosecutors have had making the case that traders at a handful of big banks conspired to profit from manipulating Libor, the benchmark once used by banks to set interest rates on an array of loans.

Libor relied on self-reported estimates of borrowing costs from banks, and prosecutors and regulators said traders pushed for those bids to be artificially high or low to make certain financial assets more profitable.

In dismissing the convictions of Mr. Connolly and Mr. Black, the appellate panel said the prosecutors hadn’t proved that the bids submitted by the bank were not rates that it could have borrowed at. “The government failed to show that any of the trader-influenced submissions were false, fraudulent or misleading,” the panel wrote. It added, “The Libor submissions were not false.”

Kenneth Breen, a lawyer for Mr. Connolly, said his client had been “fully exonerated in this contrived case.” Seth Levine, a lawyer for Mr. Black, said his client had committed no crime and was “deeply appreciative” that the appeals panel agreed.

The Justice Department did not immediately comment.

The crackdown on the manipulation of what was formally known as the London Interbank Offered Rate was one of the major criminal prosecutions to arise from the financial crisis of 2008. Big lenders including Deutsche Bank paid billions of dollars in penalties to authorities in the United States and Britain to resolve accusations that their traders sought to rig Libor. Some banks pleaded guilty in deferred prosecution agreements.

The investigations helped prompt international banking officials to phase out Libor as the primary benchmark for setting rates on loans and in derivatives contracts.