This comes as the Department of Justice (DoJ) has unsealed an indictment charging James Pepaire-Bueno, 28, of New York, and Anton Peraire-Bueno, 24, of Boston, with conspiring to commit money laundering, wire fraud, and conspiracy to commit wire fraud. The maximum sentence for each of them is 20 years in prison.
“The charges in the indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds,” the Department of Justice stated.
A “first-of-its-kind manipulation” of the Ethereum blockchain’s protocols was reportedly one of the creative scheme’s many uses for the brothers, who attended MIT. The plan was allegedly carried out in early April 2023.
The defendants used this to fraudulently access pending transactions, alter the flow of the electronic currency, and ultimately transfer $25 million in cryptocurrencies from victims to their accounts through a sequence of transactions meant to mask the ownership of the stolen funds.
According to the Department of Justice, “Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain,” and they “meticulously planned” the attack over a number of months.
In addition, they instituted front companies, private bitcoin addresses, and international cryptocurrency exchanges in order to conceal their identities and hide their illicit riches. Since then, a patch has been applied for the MEV-Boost vulnerability that was used to jeopardise the Ethereum blockchain’s integrity.
“The Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” Monaco stated. “As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets.