Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York allegedly used a maximal extractable value (MEV) exploit to steal the funds from users, and are being charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.
The alleged heist was like nothing authorities had ever seen before, a DOJ statement alleged.
“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims,” Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office said in a statement.
U.S. Attorney Damian Williams for the Southern District of New York added: “As we allege, the defendants’ scheme calls the very integrity of the blockchain into question.” The DOJ alleged that the two brothers—educated at “one of the most prestigious universities in the world” in math and computer science—were able to get access to pending transactions on Ethereum’s network and steal funds.
MEV is a term in the crypto sphere used to refer to the amount of value that can be extracted from a block production. Blocks make up a blockchain and contain data on transactions.
Though they allegedly planned the attack for months, the actual heist took just 12 seconds, the DOJ claimed. Authorities added that the two brothers had experience trading cryptocurrencies and allegedly set up shell companies and used multiple private crypto addresses and foreign cryptocurrency exchanges to cover their tracks.
Ethereum is the blockchain behind the second biggest cryptocurrency by market cap, ETH. The network is used for everything from sending funds and minting and trading NFTs to building lending and borrowing apps.
