'Gone in 12 Seconds': How MIT Students Stole $25M Crypto in a US Criminal Case First

Two brothers, both former Massachusetts Institute of Technology (MIT) students, were arrested on Wednesday for allegedly perpetrating a first-of-its-kind scheme to exploit the Ethereum blockchain and steal $25 million (£19.71 million) in cryptocurrency.

Manhattan federal prosecutors described the scheme of Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, a "novel" attack on the Ethereum blockchain, marking the first US criminal case of its kind.

First-of-its-Kind Scheme Exploited Ethereum Blockchain

In April 2023, the Peraire-Bueno brothers pulled off a daring $25 million cryptocurrency heist in 12 seconds. Their scheme involved fraudulently manipulating pending transactions on the Ethereum blockchain.

"As we allege, the defendants' scheme calls the very integrity of the blockchain into question," US Attorney Damian Williams said. Underscoring the seriousness of the case, Williams noted that the Peraire-Bueno brothers, graduates with specialised computer science and math skills from a top-tier university, utilized their education to tamper with protocols that millions of Ethereum users worldwide rely on.

"And once they put their plan into action, their heist only took 12 seconds to complete," Williams added. This unprecedented scheme, the first of its kind to be charged, highlights a critical truth: no matter how complex the fraud or innovative the techniques, dedicated prosecutors remain relentless in pursuing those who threaten the integrity of financial systems worldwide.

The indictment outlined charges of conspiracy to commit wire fraud, wire fraud itself, and conspiracy to commit money laundering, each offence carrying a maximum sentence of 20 years behind bars.

Over months, the MIT grads meticulously planned their exploit, studying the trading patterns of unsuspecting victims to steal their cryptocurrency. Anton Peraire-Bueno was apprehended in Boston, while his brother James faced arrest in New York.

"Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unravelled this first-of-its-kind wire fraud and money laundering scheme," Deputy Attorney General Lisa Monaco said.

Feds Vow to Crack Down on Emerging Crypto Crimes

Monaco declared that the Department will remain vigilant as cryptocurrency markets navigate this evolving landscape. She added that it will focus on rooting fraud, supporting victims, and restoring confidence in these markets.

Praising the innovative tactics used, IRS-CI Special Agent in Charge Thomas Fattorusso declared that IRS-CI New York's Cyber Unit followed the money trail. He further emphasised the unit's commitment to leveraging cutting-edge technology and traditional investigative methods to combat financial crime, on or off the blockchain.

Applauding the meticulous investigation by IRS-CI New York's Cyber Investigations Unit, Williams also acknowledged the valuable assistance provided by US Customs and Border Protection and the New York City Police Department.

The Office's Complex Frauds and Cybercrime Unit, led by Assistant US Attorneys Rushmi Bhaskaran and Danielle Kudla, is prosecuting this case. It is important to remember that the charges in the indictment are just allegations, and the defendants are presumed innocent unless proven guilty.

This crackdown isn't surprising, considering a recent survey revealed that millennials, a tech-savvy generation, are leading the global adoption of cryptocurrency. As more people invest in crypto, regulators are likely working to mitigate potential risks associated with the market.

The fight against cryptocurrency fraud is gaining momentum globally. In March, Britain's financial regulator issued guidelines targeting financial firms and "influencers" – social media personalities promoting investments and cryptocurrencies – to combat misleading practices.