US Prosecutor Charges Two Brothers for $25M Ethereum MEV Manipulation

Two brothers, Anton Peraire-Bueno and James Peraire-Bueno, were charged on Wednesday by the US Department of Justice (DOJ) for crypto wire transfer fraud and money laundering. The indictment alleged that the brothers illicitly acquired roughly $25 million worth of cryptocurrency by exploiting the integrity of the Ethereum network’s maximal extractable value (MEV) bots.

The Peraire-Bueno brothers targeted the MEV bots that focused on arbitrage trading and pulled off the first-of-its-kind trick in an astonishing 12 seconds, the indictment stated. However, the Justice Department discovered the ploy and quickly apprehended the brothers.

“Today, my office indicted two brothers—Anton Peraire-Bueno and James Peraire-Bueno—for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it,” US Attorney Damian Williams said.

MEV Manipulation

The Peraire-Buenos discovered a vulnerability in the Ethereum MEV and were able to manipulate the bots into including their transactions in bundles, ultimately allowing them to obtain approximately $25 million worth of cryptocurrency fraudulently. However, the vulnerability in the software has since been identified and fixed.

Upon completing the attack, the brothers began laundering the money and made attempts to cover their parts. They also rejected requests to return the stolen funds, which led to the involvement of the New York Cyber Unit.

“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims.  In this case, IRS-CI New York’s Cyber Unit simply followed the money,” IRS-CI Special Agent in Charge Thomas Fattorusso stated.

The pioneering wire fraud and money laundering scheme was uncovered through the combined investigative work of the United States Attorney’s Office for the Southern District of New York, alongside the Deputy Attorney General of the United States and the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (IRS-CI).

Up to 20 Years in Jail

Anton Peraire-Bueno, 24, resides in Boston, while James Peraire-Bueno, 28, lives in New York. They studied mathematics and computer science, respectively, at one of the most prestigious universities in the country and utilized their expertise and knowledge in cryptocurrency trading to manipulate the integrity of the Ethereum blockchain.

If proven guilty of the charges against them, each brother could spend a maximum of 20 years in jail. It’s worth noting that the statutory maximum sentences serve as informational benchmarks, with the final sentencing to be determined by a judge adhering to the guidelines set by Congress.