MIT students stole $25 million in seconds by exploiting ETH blockchain bug, DOJ says

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In approximately 12 seconds, two very educated brothers allegedly stole $25 million by falsification with THE ethereum blockchain In A never seen cryptocurrency scheme, according to has A charge that THE WE Department of Justice unsealed Wednesday.

In A DOJ press release, WE Lawyer Damien Williams said THE scheme was SO sophisticated that he "calls THE very integrity of THE blockchain In question."

"THE brothers, WHO studied computer science And mathematics has A of THE most prestigious the universities In THE world, allegedly used their specialized SKILLS And education has to alter with And manipulate THE protocols account on by millions of ethereum users through THE world," Williams said. "And once they put their plan In action, their burglary only took 12 seconds has finished."

Anton, 24, And James Péraire-Bueno, 28, were stopped Tuesday, accused with conspiracy has commit thread fraud, thread fraud, And conspiracy has commit money whitening. Each brother faces "A maximum penalty of 20 years In prison For each count," THE DOJ said.

THE alleged scheme was spear In December 2022 by THE brothers, WHO studied has MIT, After month of planning, THE charge said. THE pair apparently account on their "specialized SKILLS" And skill In cryptocurrency trade has fraudulently earn to access has "on hold private transactions" on THE blockchain, SO "used that to access has to modify certain transactions And get their the victims cryptocurrency, " THE DOJ said.

THE charge go In detail explaining that THE scheme allegedly work by operator THE ethereum blockchain In THE moments After A transaction was led but Before THE transaction was added has THE blockchain.

These on hold transactions, THE DOJ explain, must be structure In A propose block And SO valid by A validator Before he can be added has THE blockchain, which actions as A decentralized register keeping track of cryptocurrency assets. He appeared that THE brothers falsified with This process by "establishment A series of ethereum validators" through shell companies And stranger Exchanges that hidden their identities And mask their efforts has manipulate THE blocks And to input Ethereum.

HAS TO DO This, they allegedly deployed "bait transactions" designed has catch THE attention of specialized the robots often used has help buyers And sellers find lucrative outlook In THE ethereum network. When the robots ripped off up THE bait, their validators apparently exploited A vulnerability In THE process commonly used has structure blocks has to modify THE transaction by reorganization THE block has their advantage Before add THE block has THE blockchain.

When victims detected THE flight, they try has request THE funds be income, but THE DOJ alleged that THE brothers rejected those requests And hidden THE money instead.

THE brothers' online research history watch that they studied up And "took many not has hide their ill-gotten earnings," THE DOJ alleged. These not included "setting up shell companies And using several private cryptocurrency addresses And stranger cryptocurrency Exchanges" that specifically did not rely on on detailed "know your customer" (KYC) procedures.

They Also research THE "very crimes accused In THE charge," THE DOJ said. Among research terms find In THE brothers' history during THE planning phase of THE alleged scheme were sentences as "how has wash crypto" And "Exchanges with No KYC.” Later, apparently to attempt has prepare For any of them legal consequences Since THE scheme, THE brothers allegedly look for For things as "high cryptocurrency lawyers", And "money whitening law of boundaries," And "do THE United States extradite has [stranger country]."

HAS to unveil THE scheme, THE special agent In charge, Thomas Fattorusso of THE IRS Criminal Investigation (IRS-CI) New York Field Desk, said that investigators "simply follow up THE money."

"Regardless of THE complexity of THE case, We continue has lead THE effort...