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$25M in 12 seconds: MIT hacker brothers arrested in the US | #hacking | #cybersecurity | #infosec | #comptia | #pentest | #hacker

Two brothers who attended the Massachusetts Institute of Technology (MIT) were arrested on Wednesday, facing charges for an innovative scheme that exploited the maximum extractable value (MEV) bots on the Ethereum (ETH) blockchain and gained $25 million in 12 seconds.

Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, are accused of perpetrating a fraud that federal prosecutors in Manhattan described as “novel,” marking the first time such a case has been the subject of criminal charges in the U.S. In a press release published by the Office of Public Affairs, U.S. Attorney Damian Williams emphasized the severity of the alleged scheme:

As we allege, the defendants’ scheme calls the very integrity of the blockchain into question.

The brothers, who studied computer science and math at MIT, are charged with conspiracy to commit wire fraud and conspiracy to commit money laundering.

A carefully planned operation

According to the indictment, the Peraire-Bueno brothers spent months plotting to manipulate and tamper with the protocols used to validate transactions on the Ethereum blockchain. They exploited a middleware called MEV-boost, which is used by most Ethereum network “validators” responsible for verifying the validity of new transactions before they are added to the blockchain.

The conspirators established a series of Ethereum validators, deployed bait transactions to attract MEV bots and then leveraging a vulnerability in MEV-boost to prematurely release escrow content. After successfully carrying out the heist, the brothers allegedly rejected requests to return the funds and instead took steps to launder and conceal the stolen cryptocurrency.

The development follows the U.S. Securities and Exchange Commission (SEC) requesting comment for three Ethereum (ETH) spot exchange-traded fund (ETF) proposals submitted by Grayscale Investments, Fidelity, and Bitwise back in early April. In early May, such a product was launched in Hong Kong.


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