The U.S. Department of Justice announced on Wednesday that two brothers have been arrested and charged with major cryptocurrency theft. The indictment alleges that the two brothers stole approximately $25 million worth of cryptocurrency in about 12 seconds.
The U.S. Department of Justice stated that Anton Peraire-Bueno, 24, from Boston, and James Peraire-Bueno, 28, from New York, are facing multiple charges, including wire fraud and money laundering conspiracy.
Prosecutors stated that the brothers studied mathematics in college and have a broad understanding of cryptocurrency. It is alleged that they manipulated transactions on the Ethereum blockchain to steal cryptocurrency funds from other users, which is considered a “first-of-its-kind” case.
Media reports indicate that the two brothers studied computer science and mathematics at the Massachusetts Institute of Technology.
The stolen cryptocurrency funds were then transferred to shell companies, private cryptocurrency addresses, and foreign cryptocurrency exchanges. However, the movement of these funds was traced by officials from the New York State Department of Taxation and Finance.
In a statement, Damian Williams, the U.S. Attorney for the Southern District of New York, said, “The defendants’ scheme called into question the integrity of the blockchain.”
Williams added, “Their robbery was completed in just 12 seconds.”
Prosecutors mentioned that they exploited vulnerabilities in the MEV-boost software code, which most Ethereum network “validators” use to check the validity of new transactions before adding them to the blockchain. Additionally, after committing the theft, the brothers refused requests to return the funds and took steps to launder and hide the stolen cryptocurrency.
“This scheme is novel and has never been charged before. But as the indictment clearly states, no matter how complex the fraudulent behavior or how innovative the technology used, career prosecutors will relentlessly pursue those who attack the integrity of the financial system,” he said.
Both Peraire-Bueno brothers were arrested on Tuesday and appeared in local court on Wednesday afternoon. The Department of Justice stated that if convicted on all charges, they could face up to 20 years in prison.