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Federal prosecutors in Manhattan arrested MIT-trained brothers Anton and James Peraire-Bueno for a $25 million cryptocurrency heist on the Ethereum blockchain.
Law enforcement officials have described the fraud as “novel.” It marks the first time such a fraud has been subject to criminal charges in the US.
Gone in 12 Seconds
According to the US Department of Justice, the brothers executed a sophisticated heist that gained access to pending Ethereum transactions and altered the movement of the funds before they were confirmed and added to the blockchain.
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
To commit the fraud, the brothers exploited the code of popular software called MEV-boost, used by Ethereum network validators to confirm transactions before they are added to the blockchain. Authorities believe the exploit was executed in April 2023.
This strategy made them steal $25 million in cryptocurrencies in 12 seconds.
The DoJ alleged that the brothers carried out the heist using highly specialized computer science and math skills they had learned at MIT.
“As we allege, the defendants’ scheme calls the very integrity of the blockchain into question,” US Attorney Damian Williams said.
Their dad, Jaime Peraire, an Aeronautics and Astronautics Professor at MIT, said he was in shock about the whole situation and that the family did not even know what was happening.
Prosecutors said the brothers rejected calls to return the stolen funds and took steps to launder their loot.
Foreign law enforcement has already frozen roughly $3 million of the stolen funds, while the brothers converted the remainder to DAI tokens.
The brothers were arrested separately in New York City and Boston. The court has set their bonds at $250,000 each. Before they can be released on bail, the brothers will also obtain two co-signers for their release bonds.
The siblings have been charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They each face over 20 years in prison if found guilty of the three counts.
