BOSTON: Two brothers who studied at the Massachusetts Institute of Technology were arrested Wednesday for stealing $25 million worth of cryptocurrency.
Federal prosecutors in Manhattan described the heist by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, as “novel”. The case marked the first time that such a fraud had ever been the subject of U.S. criminal charges, they said.
U.S. Attorney Damian Williams announces the arrest of two for attacking the Ethereum blockchain and stealing $25 million in cryptocurrency pic.twitter.com/UwGYhJLEdE
— US Attorney SDNY (@SDNYnews) May 15, 2024
In April 2023, they stole $25 million from traders in just 12 seconds by gaining access to pending transactions and altering the movement of cryptocurrency.
“As we allege, the defendants’ scheme calls the very integrity of the blockchain into question,” U.S. Attorney Damian Williams said.
An indictment charged them with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Anton Peraire-Bueno was arrested in Boston, while James Peraire-Bueno was arrested in New York.
Their lawyers did not immediately respond to requests for comment.
Both brothers had attended Cambridge, Massachusetts-based MIT, where according to prosecutors they studied computer science and math. This helped them develop the education they used to carry out their fraud.
The brothers allegedly plotted to manipulate and tamper with the protocols used to validate transactions for inclusion on the Ethereum blockchain, a public ledger that records each cryptocurrency transaction.
Prosecutors said they did so by exploiting a vulnerability in the code of software called MEV-boost. This is used by most Ethereum network “validators,” who are responsible for checking that new transactions are valid before they are added to the blockchain.
After carrying out the heist, the brothers rejected requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency.
(REUTERS)
