The Ethereum blockchain‘s integrity is under scrutiny as two brothers, who studied computer science and math at Massachusetts Institute of Technology (MIT), allegedly used their skills to manipulate protocols used by millions of Ethereum users worldwide. This “very first of its kind” heist took only 12 seconds to complete.
The Department of Justice announced today the arrest of the two MIT graduates for allegedly stealing $25 million worth of Ethereum cryptocurrency in a “technologically sophisticated” scheme.
Anton Peraire-Bueno, 24, of Boston, and James Peraire-Bueno, 28, of New York, were arrested yesterday for their roles in the alleged fraud. The brothers are accused of exploiting a vulnerability in the Ethereum blockchain to manipulate transactions and steal cryptocurrency within a short timeframe.
The defendants allegedly “stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco.
Two Brothers Arrested for Attacking Ethereum Blockchain and Stealing $25M in Cryptocurrency
— U.S. Department of Justice (@TheJusticeDept) May 15, 2024
🔗: https://t.co/rY4No6YUrm pic.twitter.com/2Mlb3zIdpo
According to the indictment, the Peraire-Bueno brothers used their knowledge of blockchain technology to gain unauthorized access to pending transactions. They then allegedly manipulated these transactions to divert a significant amount of Ethereum to their wallets. The entire scheme is believed to have been executed within approximately 12 seconds.
They planned the exploit over several months, learning victim traders’ trading habits and systematically concealing their identities and stolen proceeds. They set up shell companies, used private addresses and foreign exchanges, and transferred stolen cryptocurrency through transactions to hide the source and ownership.
They searched online for information on how to execute the scam, conceal their involvement, cryptocurrency exchanges with limited “know your customer” procedures, attorneys with expertise in cryptocurrency cases, extradition procedures, and the crimes charged in the indictment.
The brothers are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They are scheduled to be arraigned in federal court later today. If convicted, the brothers will get five years in prison for each charge.
Special Agent in Charge Thomas Fattorusso of the (IRS-CI) New York Field Office stated that the FBI continues to lead financial criminal investigations with cutting-edge technology and traditional investigative work, both on and off the blockchain.
