US Brothers Nabbed for Swift $25m Crypto Heist

Two brothers who attended one of the most prestigious universities in the US have been arrested and charged with stealing $25m in cryptocurrency in just 12 seconds. Anton Peraire-Bueno, 24, and James Peraire-Bueno, 19, who both went to the Massachusetts Institute of Technology (MIT), allegedly carried out the heist in April 2023. They are accused of fraudulently gaining access to pending transactions and altering the destination of the funds to their own accounts.

 

Two brothers caught stealing $25m in crypto in 12 seconds. Police surround them, handcuffs ready. The stolen digital currency glows on computer screens

 

The brothers used a technique called “double-spending” to carry out the heist. This involves sending a transaction to the network and then quickly sending another transaction with the same funds to a different recipient. The network then accepts the first transaction, but the second transaction is rejected. The brothers used this technique to trick the network into thinking that the funds were still available for the first transaction, allowing them to redirect the funds to their own accounts.

The case is being closely watched by the cryptocurrency industry as it highlights the potential vulnerabilities of the technology. It also raises concerns about the security of cryptocurrency exchanges and the need for stronger regulation. The brothers are facing charges of wire fraud and money laundering and could face up to 20 years in prison if convicted.

 

Key Takeaways

  • Two brothers who studied at MIT have been arrested and charged with stealing $25m in cryptocurrency in just 12 seconds.
  • The brothers used a technique called “double-spending” to carry out the heist.
  • The case highlights the potential vulnerabilities of cryptocurrency and the need for stronger regulation.

 

Details of the Crypto Heist

 

Two figures swiftly transferring digital currency from a secure vault into their own accounts, as alarms flash and security measures fail to stop the heist

The Exploit and Theft

 

In April 2023, Anton Peraire-Bueno, 24, and James Peraire-Bueno, 21, carried out a cutting-edge scheme to exploit the Ethereum blockchain and steal $25 million in cryptocurrency. The brothers gained access to pending private transactions and altered the movement of the electronic currency, ultimately stealing $25 million from traders in just 12 seconds. This alleged scheme was novel and has never before been charged.

The exploit was executed by using a technique known as “transaction reordering” or “time bandit” attack, which involves manipulating the mathematical calculations that validate transactions on the blockchain. This allowed the brothers to alter the order of transactions in the blockchain’s public ledger, giving them the ability to front-run pending transactions and steal cryptocurrency.

 

Identification and Arrest of the Perpetrators

 

The Department of Justice (DOJ) and the FBI worked together to investigate the heist and identify the perpetrators. The Peraire-Bueno brothers were arrested on May 23, 2024, in New York, where they were indicted on charges of wire fraud and conspiracy to commit wire fraud.

The brothers were former students at the Massachusetts Institute of Technology (MIT), where they had studied computer science and blockchain technology. They were able to use their knowledge and skills to carry out the sophisticated attack on the Ethereum blockchain.

Impact on Victims and Ethereum Blockchain

 

The heist had a significant impact on the victims, who lost $25 million in stolen cryptocurrency. The attack also highlighted the vulnerabilities of the Ethereum blockchain and the need for greater security measures to prevent future attacks.

The exploit used by the Peraire-Bueno brothers was a new and sophisticated method that had not been seen before. It raised concerns about the security of the blockchain and the ability of validators to detect and prevent such attacks.

Overall, the heist carried out by the Peraire-Bueno brothers was a significant event in the history of cryptocurrency theft. It demonstrated the need for greater security measures and highlighted the risks associated with investing in cryptocurrency.

 

Legal Proceedings and Implications

 

Two brothers arrested by police, surrounded by flashing lights and cameras, with a stack of stolen cryptocurrency in the background

Criminal Charges and Potential Sentences

 

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. The charges in the indictment arise from an alleged novel scheme by the defendants to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million in cryptocurrency in just 12 seconds. The brothers could face up to 20 years in prison for each count of wire fraud and conspiracy to commit wire fraud. Additionally, they could face up to 10 years in prison for conspiracy to commit money laundering. The maximum penalty for each count of money laundering is a fine of $500,000 or twice the value of the property involved in the transaction, whichever is greater.

Investigative Techniques and Law Enforcement

 

The Internal Revenue Service Criminal Investigation (IRS-CI) New York Field Office and the U.S. Attorney’s Office for the Southern District of New York conducted the investigation. The case was brought as part of the U.S. Department of Justice’s Financial Criminal Investigations’ (FCI) efforts to combat financial crimes. The FCI is a multi-agency task force that includes the Internal Revenue Service, the Federal Bureau of Investigation, and other law enforcement agencies. The investigation was conducted using specialized skills and cutting-edge techniques to uncover the vulnerability in the Ethereum blockchain.

Deputy Attorney General Lisa Monaco and U.S. Attorney Damian Williams announced the charges. They emphasized that the U.S. Department of Justice is committed to protecting the integrity of the financial system and will continue to pursue those who seek to launder ill-gotten gains through shell companies and other means. The charges against the brothers demonstrate the government’s resolve to hold accountable those who engage in financial crimes, regardless of the method or the technology used.

By Jastra Kranjec

Jastra is an author at CryptoPresales. Over the years, she has worked in different fields of journalism and public relations, including politics, economy, crypto, and financial markets.