Two brothers who studied at MIT allegedly stole $25 million in crypto in around 12 seconds

Two brothers who studied mathematics and computer science at MIT were arrested this week and face fraud charges after they allegedly exploited the Ethereum blockchain to steal $25 million worth of cryptocurrency in a scheme that took months to plan but was executed in around 12 seconds, said the U.S. Department of Justice on Wednesday.

Anton Peraire-Bueno, 24, of Boston, and James Peraire-Bueno, 28, of New York, were charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, per a U.S. DOJ release.

Ethereum is a blockchain that allows people to carry out activities such as trading crypto, building decentralised apps, minting NFTs, and executing smart contracts.

Ethereum’s native currency, Ether (ETH) is the second largest cryptocurrency by market cap, coming in only behind Bitcoin (BTC). However, there are also many crypto tokens that are not ETH but use Ethereum’s blockchain infrastructure in order to function.

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U.S. officials remarked on the novelty of the brothers’ alleged exploit. Per court filings, the Peraire-Bueno brothers used identity concealing layers to target certain crypto traders and manipulate the way pending transactions were processed, in order to steal the assets.

“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. And once they put their plan into action, their heist only took 12 seconds to complete,” said U.S. Attorney Damian Williams for the Southern District of New York.

Cryptocurrency-related crimes are often difficult to track as the stolen funds are easy to mix with others and send to unregulated wallets worldwide. Many decentralised crypto exchanges also do not use Know-Your-Customer procedures to establish users’ identity.

Crypto prices have started rising again, as Bitcoin touched a new all time high price earlier this year. When crypto prices increase, hackers are usually incentivised to launch more attacks in order to maximise their profits on these highly volatile assets.

If convicted, the brothers each face a maximum penalty of 20 years in prison for each count, according to the U.S. DOJ.