MIT-educated brothers charged in $25m Ethereum fraud

Two brothers who studied at one of the most prestigious colleges in the US have been arrested for robbing $25m (£20m) in cryptocurrency in 12 seconds.

Accusations and Charges

Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, have been charged with wire fraud and money laundering in a groundbreaking case involving the theft of $25 million in Ethereum cryptocurrency. 

According to the US Department of Justice (DOJ), this case marks the first instance of such a sophisticated heist.

Details of the Scheme

Deputy Attorney General Lisa Monaco explained that the brothers orchestrated a technologically advanced and rapid scheme in April 2023. 

The pair, reportedly educated at the Massachusetts Institute of Technology (MIT), used their specialized skills in mathematics and computer science to exploit Ethereum’s transaction validation process.

“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, emphasizing the pivotal role of IRS agents in unraveling this complex scheme.

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Method of Execution

Prosecutors allege that the brothers fraudulently accessed pending private Ethereum transactions and altered them to transfer the cryptocurrency to their own accounts. This process, dubbed “the Exploit,” was executed within seconds. 

US Attorney Damian Williams highlighted the severity of the case, noting that it undermines the very integrity of blockchain technology.

Background and Education

The brothers, who studied at MIT, are accused of using their education to facilitate the fraud. News reports indicate their background in mathematics and computer science provided them with the skills necessary to carry out the scheme.

Aftermath and Legal Proceedings

When confronted by an Ethereum representative, the brothers allegedly refused to return the stolen funds and instead attempted to launder and conceal their illicit gains. 

Prosecutors have emphasized the novelty of this form of fraud, stating that it is the first time such a scheme has led to criminal charges.

If found guilty, Anton and James Peraire-Bueno each face over 20 years in prison. This case serves as a critical precedent in the realm of cryptocurrency fraud, highlighting the need for advanced regulatory measures to safeguard digital financial transactions.