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Two Brothers Charged with Stealing $25 million in Cryptocurrency in 12 Seconds

The U.S. Department of Justice (DOJ) charged two Massachusetts Institute of Technology-educated brothers with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering for allegedly stealing $25 million in cryptocurrency in 12 seconds.

The DOJ claims the brothers, James Peraire-Bueno, 28, and Anton Peraire-Bueno, 24, exploited the Ethereum blockchain to siphon off $25 million of cryptocurrency within 12 seconds. The men—who studied computer science and math at the Massachusetts Institute of Technology (MIT)—were arrested on 15 May after DOJ prosecutors and U.S. Internal Revenue Service (IRS) agents investigated the theft.  

The brothers allegedly used their computer science, cryptocurrency, and math skills to tamper with and manipulate the protocols of the blockchain that validates transactions, a process that millions of Ethereum users rely upon. Ethereum is an open-source software and development platform fueled by blockchain technology that anyone can use, and its cryptocurrency token, ether (ETH), is used to pay for tangible goods, services, and for work done that supports the blockchain.

“And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged,” said U.S. Attorney Damian Williams in a press release.

After months of planning, the brothers are accused of fraudulently accessing pending private transactions and then altering certain transactions to steal the funds from cryptocurrency traders—specifically, a kind of bot. The scheme focused on Ethereum’s maximal extractable value (MEV) software, which roughly 90 percent of Ethereum users use to optimize transactions, according to the indictment.

Once the cryptocurrency was stolen, the men allegedly rejected requests to return the funds and took steps to conceal the stolen wealth, according to the DOJ.

“Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole,” the DOJ said.

The brothers are also accused of concealing their identities, setting up shell companies, and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges to launder the money.

If convicted, the brothers could each be sentenced to up to 20 years in prison for each count they face.

While this scheme has not been prosecuted before, the issue has already proven controversial as some individuals consider MEV bots to be problematic, CryptoSlate reported.