Blockchain
Cryptocurrency Heist: MIT Brothers Arrested for Stealing $25 Million in 12 Seconds
Two brothers studying at MIT have been accused of exploiting a weakness in the Ethereum blockchain and stealing $25 million in 12 seconds, in what prosecutors called a one-of-a-kind caper.
Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, were charged by federal prosecutors in Manhattan with fraud and money laundering crimes. They are accused of carrying out the lightning robbery, plotted over months, from their keyboards last year.
“The brothers, who studied computer science and mathematics at one of the world’s most prestigious universities, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied on by millions of Ethereum users around the world” , Damian Williams, the U.S. Attorney for the Southern District of New York said in a statement.
The two studied at the Massachusetts Institute of Technology, with Anton graduating in February with a bachelor’s degree in computer science and mathematics and James with a master’s degree in aeronautics and astronautics in 2021.
Lawyers for the Peraire-Bueno brothers did not immediately respond to a request for comment. The brothers, arrested Tuesday in Boston and New York.
The U.S. Department of Justice has been focused on stamping out fraud and misconduct in the cryptocurrency industry, winning convictions from several high-profile industry executives, most notably FTX’s Sam Bankman-Fried, who also went to the MIT.
Ethereum is known as the largest cryptocurrency trading highway, used by thousands of apps and focused on everything from finance to gaming.
The US says the brothers created something called validators, designed to help sort transactions on the Ethereum network and to help bots make money by facilitating arbitrage and other profitable operations.
Instead, according to prosecutors, they put their own validators in place to fool the traders who ran the bots.
They secured access to pending transactions and altered the movement of electronic currency to steal cryptocurrency, the government alleges. The pair then moved the cryptocurrency through a transaction network in an attempt to hide the source of the funds, according to the US.
The two allegedly spent months planning the heist, studying the trading behaviors of Ethereum bots and creating shell companies to operate behind.
They searched online for cryptocurrency exchanges with limited “know-your-customer” procedures that they could use to launder their ill-gotten gains and even explored extradition procedures, prosecutors say.