US charges two brothers with novel $25 million cryptocurrency heist

By Nate Raymond

BOSTON (Reuters) – Two brothers studying at the Massachusetts Institute of Technology were arrested on Wednesday on charges they ran a cutting-edge scheme to exploit the integrity of the U.S. Ethereum blockchain and steal $25 million worth of cryptocurrency.

Federal prosecutors in Manhattan called the scheme carried out by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, “novel” and said the case marked the first time such a scam had been indicted in the United States.

Authorities said they carried out their elaborate heist in April 2023, stealing $25 million from traders in just 12 seconds by fraudulently accessing pending transactions and altering the movement of cryptocurrency.

“As we have alleged, the defendants’ scheme calls into question the integrity of the blockchain,” said U.S. Attorney Damian Williams.

An indictment charged them with conspiracy to commit wire fraud, wire fraud and money laundering conspiracy. Anton Peraire-Bueno was arrested in Boston, while James Peraire-Bueno was arrested in New York.

His lawyers did not immediately respond to requests for comment.

Both brothers had studied at MIT, based in Cambridge, Massachusetts; There, they studied computer science and mathematics and developed the skills and training they relied on to carry out their frauds, according to prosecutors.

The indictment alleged that for months, the Peraire-Bueno brothers planned to manipulate and tamper with protocols used to verify transactions for inclusion in the Ethereum blockchain, a public ledger that records every cryptocurrency transaction.

Prosecutors said they did this by exploiting a vulnerability in the code of software called MEV-boost, which is used by most Ethereum network “validators” who are responsible for checking whether new transactions are valid before they are added to the blockchain.

After committing the robbery, the brothers refused requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency, prosecutors said.

(Reporting by Nate Raymond in Boston; Editing by Bill Berkrot)