Two Brothers Arrested by the US Department of Justice for $25 Million Theft and Manipulation of Ethereum Blockchain
Brothers Anton Peraire-Bueno, aged 24 and residing in Boston, and James Peraire-Bueno, aged 28 and living in New York, have been apprehended by authorities on charges of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. These charges stem from their alleged involvement in a scheme to exploit the Ethereum blockchain, resulting in the duo acquiring approximately $25 million worth of cryptocurrency within a mere 12 seconds.
The siblings were arrested in their respective cities and are set to appear before U.S. Magistrate Judges in Massachusetts and New York later today. The indictment reveals a carefully planned attack on the Ethereum blockchain’s fundamental system.
According to U.S. Attorney Damian Williams for the Southern District of New York, the brothers utilized their advanced knowledge of computer science and mathematics, acquired from a renowned university, to manipulate the blockchain’s transaction validation protocols. By doing so, they gained access to and modified pending private transactions, effectively redirecting substantial amounts of cryptocurrency into their possession.
The scheme, which was meticulously planned over several months, involved studying the trading patterns of their targets and implementing various measures to conceal their identities. This included the creation of shell companies, utilization of private cryptocurrency addresses, and routing the stolen funds through foreign exchanges.
The press release stated, “Their heist was executed in a mere 12 seconds, showcasing the novelty of this alleged scheme that has never been witnessed before. However, as the indictment makes clear, regardless of how sophisticated the fraud or how innovative the techniques employed, the dedicated prosecutors of this office will relentlessly pursue those who undermine the integrity of financial systems.”
Despite the swiftness of the heist, the Department of Justice, in collaboration with the IRS Criminal Investigation (IRS-CI) New York Field Office, promptly cracked down on the manipulation. Deputy Attorney General Lisa Monaco commended the efforts of the prosecuting team and agents involved. Special Agent in Charge Thomas Fattorusso of IRS-CI emphasized the use of advanced technology combined with traditional investigative methods to trace the stolen funds.
An IRS special agent remarked, “In this case, IRS-CI New York’s Cyber Unit simply followed the money. Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations by utilizing cutting-edge technology and traditional investigative work, both on and off the blockchain.”
The brothers allegedly took significant precautions to conceal their actions, searching the internet for methods to execute their plan, cover their tracks, and launder their illicit profits. This included exploring cryptocurrency exchanges with lax “know your customer” procedures and seeking legal advice on cryptocurrency offenses and extradition. Despite their advanced tactics, they ultimately failed to evade law enforcement.
If proven guilty, Anton and James Peraire-Bueno could each face a maximum sentence of 20 years in prison for each charge they face.