The US prosecution said on Wednesday that the two brothers who graduated from the Massachusetts Institute of Technology were accused of stealing 25 million US dollars in 12 seconds using a bug in the Ethereum blockchain. This is the first case of its kind being prosecuted in the US.
Manhattan federal prosecutors charged 24-year-old Anton Peraire-Bueno and 28-year-old James Peraire-Bueno with fraud and money laundering. They are accused of spending several months carrying out a lightning heist on a computer last year.
New York's Southern District Attorney Damian Williams (Damian Williams) said in a statement: “The brothers studied computer science and math at one of the most prestigious universities in the world, and they are accused of using their expertise and education to tamper with and manipulate protocols that millions of Ethereum users around the world rely on.”
Both attended MIT. Anton graduated in February of this year with a bachelor's degree in computer science and mathematics, and James graduated in 2021 with a master's degree in aerospace.
The brothers were arrested in Boston and New York on Tuesday and are expected to appear in federal court Wednesday afternoon.
The US prosecution said the brothers built something called a validator to help place orders on the Ethereum network and help robots make money by facilitating arbitrage and other profitable transactions. Instead, the prosecution said, they installed their own validators to trick traders operating robots.
The prosecution said they obtained access to pending transactions and changed the flow of electronic money to steal cryptocurrencies. The brothers then transferred cryptocurrencies through a trading network in an attempt to hide the source of the funds.
Allegedly, the two spent months planning the heist, including studying the trading behavior of the Ethereum robot and setting up a shell company to operate behind it. The prosecution said they are searching online for cryptocurrency exchanges, which have limited “know your customer” procedures, they can use to launder money, and have even studied extradition procedures.