Federal prosecutors say two brothers with degrees from MIT pulled off a lightning-fast cryptocurrency heist stealing $25 million in just 12 seconds. But the brothers insist it wasn’t theft at all. Their defense? They simply outsmarted automated bots in a ruthless digital marketplace where no rules were broken.
The trial of Anton Peraire-Bueno, 25, and James Peraire-Bueno, 29, begins Tuesday in Manhattan federal court. Both face charges of conspiracy, wire fraud, and money laundering each count carrying a potential 20-year prison sentence.
Prosecutors have called the case “a first-of-its-kind” fraud on the Ethereum blockchain. The defense calls it innovation in an unregulated environment. The outcome could define the legal boundaries of crypto trading for years to come.
Prosecutors say the brothers spent months meticulously planning the April 2023 heist, allegedly using “bait transactions” to trick trading bots operated by three unidentified victims. According to the indictment, they exploited a “vulnerability” in Ethereum’s blockchain, allowing them to intercept private transaction data and alter it before it was officially logged all within a 12-second transaction window.
The result, prosecutors say, was a classic bait-and-switch: the victims expected a lucrative trade but ended up buying worthless, illiquid tokens instead. The Peraire-Bueno brothers allegedly disguised their identities through a network of shell companies, crypto wallets, and foreign exchanges.
Authorities also pointed to a trail of online searches including “how to wash crypto,” “top crypto lawyers,” and even the misspelled “money launder statue of limitations” as evidence of criminal intent.
“Using the specialized skills developed during their education, as well as their expertise in cryptocurrency trading, the defendants exploited the very integrity of the Ethereum blockchain,” prosecutors wrote in a 19-page indictment.
They claim the brothers “manipulated and tampered with the process by which transactions are validated,” effectively rewriting the rules of fair play in the decentralized ecosystem.
But the defense sees it differently. Attorneys Patrick Looby and others representing the brothers argue that in a marketplace without a central authority, it’s impossible to commit fraud in the traditional sense.
“There’s no government regulation,” Looby said in a June hearing. “Economic incentives guide parties’ behavior. The government has never criminalized taking advantage of a software vulnerability.”
He also argued that for fraud to exist, there must be a promise or communication between parties something prosecutors admit didn’t happen here. “There’s no alleged communication at all between the Peraire-Buenos and the traders,” Looby told the court. “They made risky bets that didn’t pay out. There was no theft as that word would normally be used.”
In a motion to dismiss the case earlier this year, the defense claimed that the so-called victims weren’t individuals but automated bots engaged in “predatory” market manipulation. They insisted that the brothers merely “thwarted a predatory attempt” a move that, before this indictment, no Ethereum user would have thought could be considered a crime.
“Before this case, no one had reason to believe exploiting a trading bot’s vulnerability could be unlawful,” the defense argued. “No court has ever applied fraud statutes to similar blockchain transactions.”
Federal prosecutors, however, are pushing back, portraying the brothers as highly educated engineers who turned their academic expertise into a criminal weapon. Both brothers graduated from MIT, where Anton studied mathematics and computer science and James specialized in aeronautics and astronautics.
The trial expected to run into early November will test the government’s growing efforts to bring more regulation and accountability to cryptocurrency markets. It also comes as the Trump administration seeks to tighten oversight of digital assets amid rising concerns over crypto fraud and decentralized finance.
If the jury sides with prosecutors, it could mark a major step toward defining crypto fraud in U.S. law. But if the brothers win, the verdict could embolden a new generation of traders who see blockchain manipulation as a clever exploit rather than a crime.
For now, one thing is certain: in a financial world where fortunes are made and lost in seconds, the line between innovation and illegality is thinner than ever.
