Ethereum
Brothers Accused of Stealing $25M on Ethereum in 12 Seconds – Transaction Validation Process Exploited by Cryptocurrency Heist
In what U.S. prosecutors say is the first case of its kind, two brothers have been charged with stealing $25 million from cryptocurrency in just 12 seconds. They are now charged with wire fraud and money laundering for the April 2023 heist.
Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, were said to have attended the school Massachusetts Institute of Technology (MIT) in mathematics and computer science. Using the skills learned at MIT, prosecutors say the duo found a way to exploit the Ethereum transaction validation process.
The brothers allegedly used this exploit to gain fraudulent access to ongoing transactions on the Ethereum blockchaina public ledger that records and validates cryptocurrency payments.
The two men were arrested on May 14 based on the indictment issued by the U.S. District Court for the Southern District of New York. The indictment against the brothers was unsealed (PDF) on Wednesday May 15, 2024.
Investigators say the brothers changed enough transactions in 12 seconds to redirect $25 million in cryptocurrency to themselves rather than the intended recipients.
In A press release, Assistant U.S. Attorney General Lisa Monaco said the brothers used “a technologically sophisticated and cutting-edge plan that they plotted for months and executed in seconds.” She also explained that Internal Revenue Service (IRS) agents played a crucial role in solving the riddle of where the cryptocurrency was going.
An Ethereum representative confronted the Peraire-Bueno brothers, but they refused to return the funds. Instead, they worked to launder and hide their ill-gotten gains, prosecutors say.
U.S. Attorney Damian Williams said the exploit “calls into question the very integrity of blockchain.” Although this theft is the first of its kind, prosecutors are prepared to uncover any other new forms of cybercrime. “As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims and restore confidence in these markets,” Monaco pledged.
The Peraire-Bueno brothers each face one count of conspiracy to commit wire fraud and conspiracy to commit money laundering. If convicted, they each face more than 20 years in prison.