Two brothers studying at MIT charged with stealing $25 million worth of cryptocurrency

Two brothers studying at the prestigiousMassachusetts Institute of Technology (MIT) were arrested on Wednesday (May 15) and charged with stealing$25 million worth of cryptocurrency. Authorities said that the brothers-Anton Peraire-Bueno, 24, and James Peraire-Bueno,28,-carried out a cutting-edge scheme to exploit the Ethereum blockchain's integrity and steal millions of dollars of cryptocurrency, the news agency Reuters reported.

Federal prosecutors in Manhattancalled the scheme perpetrated by the Bueno brothers"novel" and said the case marked the first time that such a fraud had ever been the subject of UScriminal charges.

Millions stolen in just 12seconds

The brothersexecuted their elaborate heist in April last year,stealing $25 million from traders in just 12 seconds by fraudulently gaining access to pending transactions and altering the movement of cryptocurrency, authorities said.

"As we allege, the defendants' scheme calls the very integrity of the blockchain into question," USAttorney Damian Williams said.

Anton was arrestedin Boston, while Jameswas arrestedin New York.

The indictment

At MIT, the brothers studied computer science and mathematicsand developed the skills and education they relied upon to carry out their fraud, prosecutors said on Wednesday.

An indictmentcharged themwith conspiracy to commitwire fraud, wire fraud, and conspiracy to commitmoney laundering.The indictment alleged thatfor months,the brothersplotted to manipulate and tamper with the protocols used to validate transactions for inclusion on the Ethereum blockchain.

Also watch |US charges two brothers for stealing $25 million worth of cryptocurrency

They did so by exploiting a vulnerability in the code of software called MEV-boostthatisusedby most Ethereum network "validators," who are responsible for checking that new transactions are valid before theyare addedto the blockchain, prosecutors said.

After the brotherscarried out the heist,they rejected requests to return the funds andinsteadtook steps to launder and hide the stolen cryptocurrency.

(With inputs from agencies)