MIT BROTHERS TO STAND TRIAL OVER $25M ETHEREUM FRAUD SCHEME
Two MIT-educated brothers, Anton and James Peraire-Bueno, are set to face trial in October 2025 for allegedly executing a sophisticated $25 million fraud on the Ethereum blockchain. A U.S. District Judge recently denied their motion to dismiss the case, stating the government had adequately demonstrated that the pair’s actions met the legal definition of fraud—even though the methods involved were novel.
According to the indictment, the brothers exploited a vulnerability by manipulating MEV (Maximal Extractable Value) bots, which are typically used to front-run transactions for profit. Using a four-step strategy—bait, block, search, and propagation—they reportedly used 529.5 ETH to spin up 16 Ethereum validators and lure MEV bots into a trap that allowed them to extract the funds within just 12 seconds.
The defendants argued that their conduct followed the Ethereum protocol and that the wire fraud statute did not clearly criminalize such activity. They also claimed victim bots were engaged in manipulative behavior themselves. Despite these defenses, the court is proceeding with wire fraud and money laundering charges, though one charge related to conspiracy to receive stolen property was dropped, citing concerns of regulatory overreach highlighted in a DOJ memo.
This landmark case underscores the increasing complexity of blockchain-based financial crimes and the evolving legal framework attempting to address them.
