MIT brothers arrested for $25M crypto Ethereum blockchain heist

Two brothers, both MIT students, were arrested on Wednesday on charges of masterminding a sophisticated scheme to exploit the Ethereum blockchain and make off with $25 million in crypto.

Federal prosecutors in Manhattan described the scheme by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, as "novel," highlighting that this is the first US criminal case to address such blockchain fraud.

US Department of Justice (DoJ) officials said that in April 2023, the brothers first executed their plan while attending the Massachusetts Institute of Technology (MIT), stealing $25 million from traders in just 12 seconds by manipulating pending transactions and redirecting the digital currency.

“The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe, “ said US Attorney Damian Williams for the Southern District of New York.

“They plotted for months and executed in seconds,” Williams said.

The indictment charges the brothers with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Anton was arrested in Boston, while James was taken into custody in New York. Their lawyers have yet to comment.

The brothers, who both studied computer science and math at MIT, allegedly used their technical knowledge to tamper with the protocols that validate transactions on the Ethereum blockchain.

"As we allege, the defendants' scheme calls the very integrity of the blockchain into question," said Williams.

Prosecutors claimed the brothers exploited a flaw in the MEV-boost software, which is widely used by Ethereum validators to confirm new transactions.

After their heist, the brothers refused requests to return the stolen funds and “took numerous steps to hide their ill-gotten gains, including “by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges,” the DoJ said.

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