The US Department of Justice (DOJ) has arrested two brothers accused of orchestrating an attack on the Ethereum blockchain that resulted in the theft of $25 million worth of crypto.
Anton Peraire-Bueno of Boston and James Pepaire-Bueno of New York are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.
12-Second Ethereum Exploit
The DOJ indictment alleges that the defendants fraudulently exploited the Ethereum blockchain’s integrity to obtain the substantial sum within a brief 12-second timeframe. The brothers were arrested in Boston and New York and are scheduled to appear before magistrates for their respective districts.
Deputy Attorney General Lisa Monaco described the alleged scheme as a “technologically sophisticated” and meticulously planned” endeavor executed within seconds.
The indictment reveals that the defendants plotted the exploit for several months, employing their computer science and mathematics knowledge and expertise in crypto trading to manipulate the Ethereum blockchain’s protocols.
By tampering with pending transactions, Anton Peraire-Bueno and James Pepaire-Bueno gained unauthorized access and altered the movement of Ethereum’s price, ultimately stealing $25 million from unsuspecting victims.
Brothers Face Maximum Prison Sentence
US Attorney Damian Williams for the Southern District of New York emphasized the case’s significance, asserting that the defendants’ actions doubted the blockchain’s integrity.
The indictment highlights the defendants’ alleged exploitation of protocols relied upon by “millions of Ethereum users worldwide.”
Despite the novelty of the scheme, which is the first of its kind to manipulate the Ethereum blockchain, prosecutors from the Southern District of New York vowed to pursue those who attack financial systems.
They emphasized that no matter how sophisticated the fraud or unique the techniques used, the office will hold the perpetrators accountable.
Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office stressed that the unit followed the money trail in this case, using “cutting-edge technology” and traditional investigative methods both on and off the blockchain.
Fattorusso highlighted the alleged manipulation of the Ethereum blockchain, where the defendants fraudulently accessed and altered pending transactions to steal cryptocurrency from victims. Fattorusso further alleged:
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.
If convicted, Anton Peraire-Bueno and James Pepaire-Bueno could face a maximum prison sentence of 20 years for each count.
At the time of this report, Ethereum is trading at $2,982, indicating a 3% increase in price over the past 24 hours. This upward trend follows Bitcoin, which has surged by 5.5% during the same period as it strives to regain the $65,000 milestone.
Featured image from Shutterstock, chart from TradingView.com