MIT Brothers Face Trial for $25 Million Crypto Theft
Two brothers from the Massachusetts Institute of Technology are on trial in Manhattan federal court. James and Anton Peraire-Bueno, aged 29 and 25, are accused of stealing $25 million in cryptocurrency.
Prosecutors say the brothers exploited a flaw in the Ethereum blockchain in 2023. They allegedly manipulated automated trading bots using a technique called Maximal Extractable Value (MEV). This practice is often described as the “Wild West” of crypto trading.
Details of the Alleged Scheme
The trial began Wednesday with opening arguments. Prosecutors claim the brothers tricked automated “sandwich attack” bots into making bad trades. They then reordered blockchain transactions to capture profits.
The main victim is Savannah Technologies, an Israeli crypto trading firm. Prosecutors say Savannah lost about $13 million due to the scheme. Savannah’s CEO, David Yakira, is expected to testify about how their systems were deceived. Lawyers for all parties have declined to comment.
Court documents reveal the brothers studied trading bots and found a weakness in MEV Boost. MEV Boost is open-source software used by Ethereum operators. This flaw let them view and reorder pending transactions for profit.
Prosecutors call the case “straightforward theft.” The defense argues the funds were “voluntarily traded away” in an unregulated market. Anton Peraire-Bueno reportedly searched online for phrases like “prison or jail worse,” suggesting awareness of potential legal risks.
Industry Experts and Trial Implications
Judge Jessica Clarke has allowed expert witnesses on MEV, with restrictions against “blaming the victim.”
- Evan Van Ness, CIO at TXPool Capital, said, “If people think crypto is the Wild West, MEV is the Wild West of crypto.”
- Blockchain expert Matt Cutler commented that the brothers “tricked someone into doing a sandwich that should’ve been safe by the rules of the network.”
The trial may set new legal boundaries for crypto trading. Many in the industry are watching to see how it defines the line between smart coding and criminal behavior.
Read the full Bloomberg report here.
