Two MIT-educated brothers accused of pulling off a $25 million MEV exploit on the Ethereum blockchain will stand trial, after a federal judge denied their bid to dismiss criminal charges.
Judge Rules Exploiting Ethereum’s Code Doesn’t Shield from Fraud
On July 24, U.S. District Judge Jessica Clarke ruled that the conduct of Anton and James Peraire-Bueno, who allegedly manipulated MEV (Maximal Extractable Value) bots, meets the criteria for wire fraud — regardless of whether their methods exploited “open” parts of Ethereum’s code.
“The wire fraud statute provided defendants with adequate notice that their alleged conduct was criminal,” the judge stated, rejecting claims that system-permitted behavior is exempt from prosecution.
The brothers face charges of wire fraud, conspiracy to commit wire fraud, and money laundering, stemming from a 12-second exploit carried out in April 2023, according to federal prosecutors.
A Sophisticated Attack Using the MEV Bots’ Own Strategy
MEV bots are designed to scan Ethereum’s mempool and front-run profitable trades. The indictment alleges that the brothers used a strategic four-step plan — “bait, block, search, and propagation” — to lure MEV bots into executing manipulated transactions.
They allegedly established 16 Ethereum validators using 529.5 ETH, creating “lure transactions” to trigger the bots, and then manipulated the block validation process to front-run the bots back.
The strategy resulted in a $25 million profit in under 12 seconds — a first-of-its-kind exploit on Ethereum.
Defense Claims System Allowed It — But Judge Disagrees
The brothers argued they were only interacting with the Ethereum protocol as designed, claiming the bots they exploited were engaging in manipulation themselves. They further argued that no law clearly prohibited their actions, invoking a Department of Justice memo on avoiding crypto overreach.
However, the court ruled that novel technical methods do not protect from liability when intent to defraud is present.
Trial Set for October 2025
With the dismissal motion denied, the case moves forward toward trial in October 2025. Though the exact date hasn’t been confirmed, pre-trial motions continue in the Southern District of New York.
If convicted, the Peraire-Bueno brothers could face decades in federal prison, along with heavy fines, in a landmark case testing how U.S. law applies to blockchain-native exploits.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.
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