Tech
Two brothers studying at MIT allegedly stole $25 million in cryptocurrency in about 12 seconds
Two brothers studying mathematics and computer science at MIT were arrested this week and face fraud charges after they allegedly exploited the Ethereum blockchain to steal $25 million worth of cryptocurrencies in a scheme that took months of planning but was executed in about 12 seconds, the US Department of Justice said on Wednesday.
Anton Peraire-Bueno, 24, of Boston, and James Peraire-Bueno, 28, of New York, were charged with conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering, according to a release from the United States Department of Justice.
Ethereum is a blockchain that allows people to do things like trading cryptocurrencies, building decentralized apps, minting NFTs, and executing smart contracts.
Ethereum’s native currency, Ether (ETH) is the second largest cryptocurrency by market capitalization, behind only Bitcoin (BTC). However, there are also many crypto tokens that are not ETH but use the Ethereum blockchain infrastructure to function.
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U.S. officials highlighted the novelty of the brothers’ alleged exploit. According to court documents, the Peraire-Bueno brothers used layers to hide their identities targeting certain cryptocurrency traders and manipulating how pending transactions were processedin order to steal the goods.
“As we argue, the defendants’ plan calls into question the very integrity of the blockchain. The brothers, who studied computer science and mathematics at one of the world’s most prestigious universities, allegedly used their specialist skills and education to tamper with and manipulate the protocols relied on by millions of Ethereum users around the world. And once they put their plan into action, the robbery took just 12 seconds to complete,” said U.S. Attorney Damian Williams for the Southern District of New York.
Cryptocurrency crimes are often difficult to trace as stolen funds are easy to mix with others and send to unregulated wallets around the world. Additionally, many decentralized cryptocurrency exchanges do not use Know-Your-Customer procedures to establish user identities.
Cryptocurrency prices have started to rise again, as Bitcoin hit a new all-time high price earlier this year. When cryptocurrency prices rise, hackers are usually incentivized to launch more attacks in order to maximize profits on these highly volatile assets.
If convicted, the brothers each face a maximum sentence of 20 years in prison on each charge, according to the U.S. Department of Justice.
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