What just happened? Two MIT-educated brothers were arrested by federal agents this week for allegedly stealing about $25 million in cryptocurrency from a number of victims. According to the DOJ, Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, were charged with multiple counts of wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering for their actions.
The Justice Department said that this is the first time anyone has exploited the Ethereum blockchain's transaction validation protocols to fraudulently gain control over pending transactions. Once they gained control illicitly, the brothers allegedly manipulated all pending cryptocurrency transfers and stole $25 million from unsuspecting victims within an extraordinarily short time span of just 12 seconds.
According to reports, the modus operandi involved manipulating the 'maximum extractable value' (MEV) on the Ethereum blockchain and then "using test transactions that forced the blockchain to prematurely release the contents of a proposed block," enabling them to siphon the cryptocurrency to their account. Thereafter, the brothers reportedly moved the funds across multiple shell companies and offshore crypto exchanges to hide their tracks and evade law enforcement.
According to CBS News, the brothers started planning the heist as far back as in December 2022 when they targeted three traders on the Ethereum platform to gain access to pending private transactions and then altered these transactions to steal their crypto assets. The suspects reportedly spent months planning before putting their scheme into action between April and June of last year. According to the prosecutors, the brothers ignored requests from at least one victim, their attorney, and an Ethereum representative to return the stolen funds.
Both were arrested earlier this week and are expected to make their initial court appearances next Wednesday. They face a maximum sentence of 20 years for each count. The brothers are yet to release a statement on the matter and CBS could not reach their attorneys for a comment.
The Bueno brothers studied math, computer science, aeronautics, astronautics and aerospace engineering at MIT. The university confirmed that Anton Peraire-Bueno earned a B.S. in computer science and engineering from the institution in February 2024, while James Peraire-Bueno earned a B.S. in mathematics, computer science and aerospace engineering in June 2019, as well as an M.S. in aeronautics and astronautics in June 2021.