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Two former MIT students accused of stealing $25 million in cryptocurrency in 12 seconds
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A representation of Ethereum, a digital currency.
CNN—
Two brothers studying at the Massachusetts Institute of Technology were arrested Wednesday on US charges of carrying out a cutting-edge scheme to exploit the integrity of the Ethereum blockchain and steal $25 million worth of cryptocurrency.
Federal prosecutors in Manhattan called the scheme perpetrated by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, “novel” and said the case marked the first time such fraud had been subject of US criminal charges.
Authorities said they carried out their elaborate heist in April 2023, stealing $25 million from traders in just 12 seconds by gaining fraudulent access to pending transactions and altering the movement of the cryptocurrency.
“As we argue, the defendants’ scheme calls into question the very integrity of the blockchain,” said US Attorney Damian Williams.
A accusation they 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 MIT in Cambridge, Massachusetts, where prosecutors say they studied computer science and mathematics and developed the skills and education they relied on to carry out their fraud.
The indictment alleged that for months the Peraire-Bueno brothers had plotted to manipulate and tamper with the protocols used to validate transactions for inclusion in the Ethereum blockchain, a public ledger that records every cryptocurrency transaction.
Prosecutors said they did so by exploiting a vulnerability in the code of software called MEV-boost used by most of the Ethereum network’s “validators,” responsible for verifying that new transactions are valid before they are added to the blockchain.
Prosecutors said that after carrying out the robbery, the brothers rejected requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency.