MIT Brothers Arrested for Alleged $25M Ethereum Blockchain Manipulation

In an unprecedented case, two brothers who studied math and computer science at the prestigious Massachusetts Institute of Technology (MIT) have been arrested and charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering for allegedly stealing $25 million in cryptocurrency by exploiting vulnerabilities in the Ethereum blockchain.


  • Brothers Anton Peraire-Bueno, 24, and James Pepaire-Bueno, 28, have been charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering for allegedly stealing $25 million in cryptocurrency.
  • The brothers, who studied math and computer science at MIT, allegedly exploited the Ethereum blockchain by manipulating its protocols and gaining access to pending transactions.
  • They are accused of altering the movement of electronic currency and stealing the funds within approximately 12 seconds, in what authorities call a “first-of-its-kind manipulation of the Ethereum blockchain.”
  • The brothers allegedly rejected requests to return the stolen funds and attempted to hide the assets using shell companies and foreign crypto exchanges, transferring them to several wallets.
  • If convicted, the brothers could face up to 20 years in prison for each count.

Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York, are accused of engaging in a sophisticated scheme that manipulated the Ethereum blockchain’s protocols, allowing them to gain access to pending transactions and alter the movement of electronic currency.

The U.S. Department of Justice (DOJ) alleges that the brothers used their specialized skills and education to carry out the theft, which took only 12 seconds to complete.

According to the unsealed indictment, the Peraire-Bueno brothers spent months planning the heist, leveraging their expertise in crypto trading and their understanding of the Ethereum blockchain’s inner workings.

The alleged scheme exploited a vulnerability in the process commonly used to structure blocks, enabling the brothers to reorder transactions to their advantage before adding the block to the blockchain.

  • The brothers allegedly established a series of Ethereum validators through shell companies and foreign exchanges, concealing their identities and masking their efforts to manipulate the blocks and seize Ethereum.
  • They deployed “bait transactions” designed to catch the attention of specialized bots used by buyers and sellers to find lucrative prospects in the Ethereum network.
  • When the bots snatched up the bait, the brothers’ validators seemingly exploited the vulnerability, altering the transactions and funneling the cryptocurrency to themselves.

Victims of the alleged theft attempted to request the return of their funds, but the DOJ claims that the brothers rejected these requests and instead took steps to hide their gains.

The Peraire-Bueno brothers allegedly set up shell companies and used multiple private cryptocurrency addresses and foreign exchanges that did not rely on detailed “know your customer” (KYC) procedures to conceal their activities.

The brothers’ online search history revealed that they had researched the crimes they were eventually charged with, as well as methods to evade detection and potential legal consequences.

Searches included phrases such as “how to wash crypto,” “exchanges with no KYC,” “top crypto lawyers,” “money laundering statute of limitations,” and inquiries about extradition from specific foreign countries.

U.S. Attorney Damian Williams emphasized the severity of the alleged crime, stating that the brothers’ actions

“call the very integrity of the blockchain into question.”

He added that regardless of the sophistication of the fraud or the novelty of the techniques used, prosecutors would be relentless in pursuing those who attack the integrity of financial systems.

The arrests come at a time when the U.S. Securities and Exchange Commission (SEC) is considering the approval of an Ethereum exchange-traded fund (ETF). Some experts believe that this alleged fraud could fuel the SEC’s skepticism and potentially impact their decision.

If convicted, the Peraire-Bueno brothers face a maximum penalty of 20 years in prison for each count.

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