The US Department of Justice (DOJ) has arrested two brothers accused of orchestrating an attack on the Ethereum blockchain that resulted in the theft of $25 million worth of crypto. 

Anton Peraire-Bueno of Boston and James Pepaire-Bueno of New York are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. 

12-Second Ethereum Exploit

The DOJ indictment alleges that the defendants fraudulently exploited the Ethereum blockchain’s integrity to obtain the substantial sum within a brief 12-second timeframe. The brothers were arrested in Boston and New York and are scheduled to appear before magistrates for their respective districts.

Deputy Attorney General Lisa Monaco described the alleged scheme as a “technologically sophisticated” and meticulously planned” endeavor executed within seconds. 

The indictment reveals that the defendants plotted the exploit for several months, employing their computer science and mathematics knowledge and expertise in crypto trading to manipulate the Ethereum blockchain’s protocols. 

By tampering with pending transactions, Anton Peraire-Bueno and James Pepaire-Bueno gained unauthorized access and altered the movement of Ethereum’s price, ultimately stealing $25 million from unsuspecting victims. 

Brothers Face Maximum Prison Sentence

US Attorney Damian Williams for the Southern District of New York emphasized the case’s significance, asserting that the defendants’ actions doubted the blockchain’s integrity. 

The indictment highlights the defendants’ alleged exploitation of protocols relied upon by “millions of Ethereum users worldwide.” 

Despite the novelty of the scheme, which is the first of its kind to manipulate the Ethereum blockchain, prosecutors from the Southern District of New York vowed to pursue those who attack financial systems.

They emphasized that no matter how sophisticated the fraud or unique the techniques used, the office will hold the perpetrators accountable.  

Special Agent in Charge Thomas Fattorusso of the IRS Criminal Investigation (IRS-CI) New York Field Office stressed that the unit followed the money trail in this case, using “cutting-edge technology” and traditional investigative methods both on and off the blockchain. 

Fattorusso highlighted the alleged manipulation of the Ethereum blockchain, where the defendants fraudulently accessed and altered pending transactions to steal cryptocurrency from victims. Fattorusso further alleged:

These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of the electronic currency, and ultimately stealing $25 million in cryptocurrency from their victims. 

If convicted, Anton Peraire-Bueno and James Pepaire-Bueno could face a maximum prison sentence of 20 years for each count. 

At the time of this report, Ethereum is trading at $2,982, indicating a 3% increase in price over the past 24 hours. This upward trend follows Bitcoin, which has surged by 5.5% during the same period as it strives to regain the $65,000 milestone.

Featured image from Shutterstock, chart from TradingView.com

Ethereum Insider Steven Nerayoff has once again leveled some accusations against Ethereum’s co-founder Vitalik Buterin. This time, Vitalik is accused of “deleting history,” amongst other things. 

Ethereum Founder Vitalik Buterin Covering His Tracks?

Nerayoff stated in an X (formerly Twitter) post how the Ethereum co-founder was deleting history and remaining silent in the face of serious allegations. His comment seemed to suggest that Vitalik was trying to cover his tracks as he noted how Vitalik’s private Facebook account had now been deleted. 

The former Ethereum advisor highlighted how he and Vitalik were friends on the social media platform despite the Ethereum founder “lying” that they had only met a few times. Nerayoff also mentioned hearing rumors that Vitalik had deleted certain posts on the X platform. Interestingly, he added that Vitalik was “purging” ETH’s on-chain history. 

When another X user raised the possibility of data on the blockchain being deleted or altered, Nerayoff responded and alleged that Ethereum isn’t a decentralized blockchain. According to him, it is probably better to call the network “a database with a back door.” 

Meanwhile, he also hinted that Vitalik was ready in case he got into any legal troubles, stating that the Ethereum founder had already gotten a Montenegro passport. The country happens to be one of the foremost non-extradition countries. 

Nerayoff had previously mentioned how he was going to expose certain criminals, with Vitalik possibly being one of them. 

ETH price falls to $2,300 | Source: ETHUSD on Tradingview.com

Nerayoff Suggests There Is More To Come

Steven Nerayoff stated in another X post that he still has “plenty of ammunition left,” hinting that there were still more revelations to come. In fact, “the big bombs haven’t even hit yet,” he further remarked. He once again alleged that they tried to silence him by discrediting and imprisoning him because of all these secrets that he holds. 

This was a “big mistake,” in Nerayoff’s opinion, as this only helped him uncover so much more while “fighting and winning against the Feds.” The Department of Justice (DOJ) had charged the former Ethereum advisor with extortion charges, which he pleaded not guilty to. These charges were eventually dropped in May last year due to a lack of concrete proof. 

Meanwhile, Nerayoff has revealed that he had no idea of what was going on in relation to the irregularities that had earlier occurred in the Ethereum ecosystem. He said that they (possibly ETH’s founders) never kept him in the loop of their activities because they knew he couldn’t be “bought.”

He also mentioned how he left Joe Lubin after starting ConsenSys because he thought that the Ethereum co-founder was a “sociopath.”  

Featured image from Unitimes, chart from Tradingview.com