Ethereum
Feds Arrest Crypto Bros for ‘Attacking Ethereum’ With MEV Exploit
The United States Department of Justice announced Wednesday that he arrested Anton and James Pepaire-Bueno and charged them with actions that the government said allowed them to steal $25 million in cryptocurrency through the Ethereum blockchain in just 12 seconds.
Anton Peraire-Bueno, 24, of Boston, and James Pepaire-Bueno, 28, of New York, allegedly used a maximum extractable value (MEV) exploit to steal user funds and are charged with conspiracy to commit electronic fraud. fraud and conspiracy to commit money laundering.
The alleged heist was unlike anything authorities had ever seen before, according to a DOJ statement.
“These brothers allegedly committed an early manipulation of the Ethereum blockchain by fraudulently accessing ongoing transactions, altering the movement of electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims,” Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York field office said in a statement.
U.S. Attorney Damian Williams of the Southern District of New York added: “As we allege, the defendants’ plan calls into question the very integrity of blockchain. »
The DOJ alleged that the two brothers, trained at “one of the most prestigious universities in the world” in mathematics and computer science, were able to access pending transactions on the Ethereum network and steal funds.
MEV is a term in the crypto sphere used to refer to the amount of value that can be extracted from a block production. Blocks make up a blockchain and contain transaction data.
The DOJ alleged that through this complex system, the brothers were able to use bots to identify arbitrage opportunities, preview trades before they were processed on the network, and essentially copy and perform transactions. fake transactions in order to pocket funds. The brothers allegedly targeted traders using MEV bots, “exploiting a vulnerability in the MEV-Boost relay code” to gain an advantage on incoming trades.
Although they allegedly planned the attack for months, the heist took only 12 seconds, the DOJ claimed. Authorities added that both brothers had experience trading cryptocurrencies and allegedly created shell companies and used multiple private crypto addresses and foreign cryptocurrency exchanges to cover their tracks.
Ethereum is the blockchain behind the second largest cryptocurrency by market capitalization, ETH. The network is used for everything from sending funds to minting and trading. NFT to construction lending and borrowing apps.
Editor’s note: This story was updated after publication with additional details.