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Brothers Accused of Stealing $25 Million in Ethereum in 12 Seconds: Crypto Heist Exploited Transaction Validation Process
In what US prosecutors say is the first case of its kind, a pair of brothers have been accused of stealing $25 million worth of assets. cryptocurrency in just 12 seconds. They now face charges of wire fraud and money laundering for the April 2023 robbery.
Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, reportedly studied at Massachusetts Institute of Technology (MIT) in mathematics and computer science. Using the skills learned at MIT, prosecutors say the duo has found a way to leverage the Ethereum transaction validation process.
The brothers allegedly used this exploit to gain fraudulent access to pending transactions the Ethereum blockchaina public ledger that records and validates cryptocurrency payments.
The pair were arrested May 14 on an indictment issued in the U.S. District Court for the Southern District of New York. The accusation against the brothers was opened (PDF) Wednesday 15 May 2024.
Investigators say the brothers altered enough transactions in 12 seconds to redirect $25 million in cryptocurrency to themselves instead of the intended recipients.
In a press release, U.S. Deputy Attorney General Lisa Monaco said the brothers used “a technologically sophisticated, cutting-edge scheme that they planned for months and executed in seconds.” She also explained that Internal Revenue Service (IRS) agents played a crucial role in solving the puzzle of where the cryptocurrency went.
An Ethereum representative confronted the Peraire-Bueno brothers, but they refused to return the funds. Instead, they worked to launder and hide their ill-gotten gains, prosecutors allege.
US Attorney Damian Williams said the exploit “calls into question the very integrity of the blockchain.” Although this theft was the first of its kind, prosecutors are ready to uncover any other new forms of cybercrime. “As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore trust in these markets,” Monaco promised.
The Peraire-Bueno brothers are each charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. If convicted, they each face more than 20 years in prison.