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16/05/24
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U.S. DOJ Reveals Two Brothers Who Exploited Ethereum Blockchain to Steal Crypto
On May 15, the Office of Public Affairs of the U.S. Department of Justice published a press release noting that two brothers have been arrested for stealing crypto valued at $25 million after they attacked the Ethereum blockchain.
Both Anton Peraire-Bueno and James Pepaire-Bueno were charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. They allegedly adopted a new scheme to exploit the Ethereum blockchain’s integrity and steal crypto within about 12 seconds.
“As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe,” said U.S. Attorney Damian Williams for the Southern District of New York.
The exploit is believed to be the very first of its kind, involving the manipulation and tampering of the processes and protocols used to validate and add transactions to the Ethereum blockchain.
They were able to fraudulently gain access to pending private transactions, altering some transactions, and obtaining victims’ crypto. They did not accept requests to return the stolen crypto and took several steps to hide their ill-gotten gains.
While planning the exploit, they did many things to hide their identities and established the groundwork to hide the stolen crypto. They established shell firms and used multiple private crypto addresses, as well as foreign crypto exchanges.
Some of the information they sought online while planning the exploit included:
“ways to conceal their involvement in the Exploit, cryptocurrency exchanges with limited “know your customer” procedures that they could use to launder their criminal proceeds, attorneys with expertise in cryptocurrency cases, extradition procedures, and the very crimes charged in the indictment.”
They face imprisonment of up to 20 years for each count, if convicted.
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