SANDWICH ATTACK ON $ETH ETHEREUM ENDED WITH MISTRIAL – LEGAL UNCERTAINTY IN DEFI
The trial in Manhattan related to the exploitation of 25 million USD through “sandwich attacks” on Ethereum ended with a mistrial as the jury could not reach a unanimous decision. Two brothers are accused of exploiting MEV (Maximal Extractable Value) to execute “sandwich” transactions that profited at the expense of users.
Prosecutors claim this is fraudulent behavior, while the defendants argue that they were merely applying the algorithms and blockchain laws correctly, and did not violate criminal law. This is one of the first cases to question whether MEV exploitation is considered fraud under traditional law or legal on blockchain?
The mistrial verdict reflects the legal gray area between “code is law” in crypto and traditional criminal law, which requires proof of fraudulent intent. The jury's inability to reach a decision indicates the difficulty of applying traditional law to automated behaviors on the blockchain.
Consequences for the DeFi market:
Investors and trading bot programmers are unclear about which behaviors might be prosecuted.
DeFi projects and MEV tools must design more carefully to reduce legal risks.
Regulators may flexibly define criminal behaviors, leading to stricter regulations in the future.
The “sandwich attack” with damages of 25 million USD serves as a warning: traditional law has not kept pace with high-tech activities on blockchain. Investors, developers, and participants should closely monitor legal developments as they will impact risks and the operation of the crypto ecosystem.
