Brothers charged with stealing $25 million in Ethereum in 12 seconds — Cryptocurrency heist exploited transaction validation process

In what U.S. prosecutors are calling the first case of its kind, a pair of brothers have been charged with stealing $25 million worth of cryptocurrency in just 12 seconds. They're now charged with wire fraud and money laundering for the April 2023 heist.

Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, were reportedly educated at the Massachusetts Institute of Technology (MIT) in mathematics and computer science. Using the skills they learned at MIT, prosecutors say the duo found a way to exploit the Ethereum transaction validation process.

The brothers allegedly used that exploit to gain fraudulent access to pending transactions on the Ethereum blockchain, a public ledger that records and validates cryptocurrency payments. 

The pair was arrested on May 14 on the indictment handed down from the United States District Court of the Southern District of New York. The indictment against the brothers was unsealed (PDF) on Wednesday, May 15, 2024.

Investigators say the brothers altered enough transactions in 12 seconds to redirect $25 million in cryptocurrency to themselves instead of the intended recipients.

In a press release, U.S. Deputy Attorney General Lisa Monaco stated that the brothers used "a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds." She also explained that agents from the Internal Revenue Service (IRS) played a crucial role in solving the riddle of where the cryptocurrency went.

A representative for Ethereum confronted the Peraire-Bueno brothers, but they refused to return the funds. Instead, they worked to launder and hide their ill-gotten gains, prosecutors allege.

U.S. Attorney Damian Williams stated the exploit "calls the very integrity of the blockchain into question." Even though this theft was the first of its kind, prosecutors are prepared to uncover any other new forms of cybercrime. "As cryptocurrency markets continue to evolve, the Department will continue to root out fraud, support victims, and restore confidence to these markets," Monaco pledged.

The Peraire-Bueno brothers face one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. If convicted, they each face more than 20 years in prison.