Gone In 12 Seconds: Two MIT Brothers Face Trial For Speedy $25 Million Crypto Heist

Two MIT-trained brothers accused of stealing $25 million in cryptocurrency in just 12 seconds face trial this week in Manhattan federal court. Prosecutors call it a “first-of-its-kind” fraud. The defense says they simply outsmarted “predatory” trading bots in a lawless environment, according to Business Insider.

Anton Peraire-Bueno, 25, and James Peraire-Bueno, 29, are charged with conspiracy, wire fraud, and money laundering — each count carrying up to 20 years in prison.

Prosecutors say the brothers spent months planning an April 2023 Ethereum blockchain theft, researching “how to wash crypto,” “top crypto lawyers,” and even “money launder statue of limitations.” They allegedly used “bait transactions” to study three traders’ bots, then “lured” them into a trap with irresistible crypto trades. Once the bots took the bait, the brothers exploited a software “vulnerability” to view private data and “tamper” with transactions, prosecutors say.

BI writes that instead of profits, the victims’ $25 million bought worthless “junk crypto.” The theft took place in just 12 seconds — before the trades were permanently logged on the blockchain.

“Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading,” the brothers “exploited the very integrity of the Ethereum blockchain,” prosecutors wrote in their indictment. They say the pair hid their identities and funds through shell companies and foreign exchanges.

The defense calls the case an overreach. “There’s no central authority” on the Ethereum blockchain, attorney Patrick Looby argued in June. “And there’s no government regulations. Instead, economic incentives guide parties’ behavior.”

For fraud, “there needs to be a promise to the victim,” Looby said. “Here, there is no alleged communication at all between the Peraire-Buenos and the traders. And for that reason as well, there’s no alleged intent to defraud.”

The traders, he added, “made very risky bets on a strategy that didn’t pay out. But there was nothing stolen and there was no theft, as that word would normally be used.”

Earlier filings argue the victims lost funds “through pre-programmed trades without ever interacting with the Peraire-Buenos.” The defense wrote, “Before this indictment, no Ethereum user would have understood that thwarting a predatory attempt by ‘bots’ engaged in market manipulation could lead to criminal charges.”

“No court has ever applied these statutes to similar transactions,” they added. “And the Peraire-Buenos had no reason to know that their alleged conduct may be considered unlawful.”

The trial begins Tuesday and may run into early November.