Mistrial Declared for MIT-Educated Brothers in $25M Ethereum Blockchain Heist Case

A federal judge in Manhattan has declared a mistrial in the case against two Massachusetts Institute of Technology-educated brothers, Anton ...

A federal judge in Manhattan has declared a mistrial in the case against two Massachusetts Institute of Technology-educated brothers, Anton and James Peraire-Bueno, who were accused of carrying out a sophisticated and novel scheme to steal $25 million worth of cryptocurrency from the Ethereum blockchain. The jury was unable to reach a unanimous verdict on the charges of wire fraud and money laundering.

Accusations of a "High-Speed Bait-and-Switch"

The Peraire-Bueno brothers, who studied computer science at MIT, were indicted in May 2024 for allegedly exploiting a vulnerability in the protocols used by Ethereum network validators. Prosecutors argued that for months, the brothers meticulously plotted to manipulate and tamper with the transaction validation process.

Assistant U.S. Attorney Ryan Nees described the scheme as a "high-speed bait-and-switch." The brothers allegedly exploited the MEV-boost software, which is widely used by Ethereum "validators" (the entities responsible for checking and adding new transactions to the blockchain). According to the prosecution, the brothers planted a deceptive trade that lured trading bots into a trap, allowing them to drain the accounts of other cryptocurrency traders in a matter of seconds.

Defense Claims Legitimate Trading Strategy

The defense strongly countered the prosecution's claims. Katherine Trefz, representing James Peraire-Bueno, argued that the trading strategy executed by the brothers was not criminal, but rather a novel and legitimate maneuver "consistent with the principles at play in this very competitive trading environment."

The mistrial, declared by U.S. District Judge Jessica Clarke after the jury failed to reach an agreement, leaves the future of the high-profile case uncertain. The outcome of the case has been closely watched by the crypto community, as it addresses the legal boundaries of sophisticated trading strategies and manipulation within decentralized finance (DeFi). The brothers’ indictment came just months before a shift in political administration that signaled a potentially more "crypto-friendly" approach to enforcement, yet the trial proceeded despite this change in priorities.