Crypto
Mistrial declared for MIT-educated brothers accused of $25M cryptocurrency heist | Massachusetts Lawyers Weekly
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A federal judge in New York on Nov. 7 declared a mistrial in the case of two Massachusetts Institute of Technology-educated brothers charged with carrying out a novel scheme to steal $25 million worth of cryptocurrency in 12 seconds that prosecutors said exploited the Ethereum blockchain’s integrity.
U.S. District Court Judge Jessica Clarke in Manhattan sent jurors home after they were unable to reach agreement on whether to convict or acquit Anton Peraire-Bueno and James Peraire-Bueno of charges that they carried out a first-of-its-kind wire fraud and money laundering scheme.
The mistrial was confirmed by William Fick, a lawyer for Anton Peraire-Bueno. A spokesperson for Manhattan U.S. Attorney Jay Clayton did not respond to a request for comment.
Both brothers attended Cambridge-based MIT, where prosecutors say they studied computer science and developed the skills they relied on for their trading strategy.
They were indicted in May 2024, before President Donald Trump’s administration came into office, ushering in a new, crypto-friendly approach to enforcement. Despite the shift in priorities, the case against the brothers proceeded to trial.
Assistant U.S. Attorney Ryan Nees in his opening statement on Oct. 15 accused the brothers of carrying out a “high-speed bait-and-switch” designed to lure trading bots into a trap and drain the accounts of other cryptocurrency traders.
Prosecutors said that for months, the Peraire-Bueno brothers plotted to manipulate and tamper with the protocols used to validate transactions for inclusion on the Ethereum blockchain, a public ledger that records each cryptocurrency transaction.
They did so by exploiting a vulnerability in the code of software called MEV-boost that is used by most Ethereum network “validators,” who are responsible for checking that new transactions are valid before they are added to the blockchain, prosecutors said.
“Then they planted a trade that looked like one thing from the outside, but was secretly something else,” Nees told jurors in his opening statement. “Then, just as the defendants planned, the victims took the bait.”
Katherine Trefz, a lawyer for James Peraire-Bueno, countered that the trading strategy they executed was not just novel but legitimate and “consistent with the principles at play in this very competitive trading environment.”
(Reporting by Nate Raymond in Boston; editing by Diane Craft)
How Indiana’s redistricting could impact the legislative session
Statehouse reporter Kayla Dwyer breaks down tensions between Indiana and the Trump administration regarding the state’s redistricting efforts.
Indiana lawmakers are hoping to make the state a cryptocurrency leader by allowing the state to invest in digital currencies like Bitcoin for state savings and retirement plans while prohibiting local communities from restricting crypto companies.
The legislation, House Bill 1042, comes as excitement grows over the once obscure digital assets that have made millionaires and wiped-out fortunes. Its supporters now include some of the country’s most powerful people, including President Donald Trump and initially hesitant financial institutions, while the first major piece of crypto legislation passed Congress earlier this year.
Now, Indiana is looking for a slice of the windfall. The topic was one of just a few to get an earlier-than-usual hearing as lawmakers consider redistricting, signaling it’s a major topic of interest among Republicans.
“Crypto policy will become a mainstay of this committee’s work for probably years to come,” said bill author Kyle Pierce, R-Anderson, at a House Financial Institutions Committee meeting Dec. 4.
A volatile investment?
Though the bill would allow public investment funds to delve into the world of digital currency, it stops short of allowing direct crypto investments.
Instead, the bill applies to cryptocurrency exchange traded funds, or EFTs — a safer, federally regulated fund that tracks crypto prices, either by holding the digital assets or a contract that speculates on prices in the future.
The state investment programs required to provide such options include the 529 education savings plan and certain retirement funds for teachers, public employees and lawmakers. It also allows other state investment funds to place their assets in crypto EFTs.
While less volatile than a direct investment, it’s not entirely without risk. Because there is less oversight in the underlying crypto market, the Securities and Exchange Commission has warned it’s difficult to prevent fraud and ensure fairness, even for EFT investors.
That was a tentative concern for Tony Green, deputy executive director of the Indiana Public Retirement System, at the House Financial Institutions Committee hearing Dec. 4.
Though neutral on the bill, Green said IPRS would want to ensure there were proper disclaimers about volatility. And while the agency wants to offer choices to their members, he said, those surveyed were generally uninterested.
No anti-crypto regulations
Another aspect of the bill limits how local governments and state agencies can regulate crypto, though Pierce said it’s only intended to ensure laws don’t unfairly target crypto.
Specifically, it would prohibit regulation of an individual or a business’ ability to accept digital currency as payment, including by taxing use of the payment method. It also stops local governments from denying crypto mining facilities in areas zoned for industrial use or applying noise restrictions specific to crypto.
There was some worry about a clause in the bill that bans a public agency from prohibiting a person’s ability to “use or accept digital assets as a method of payment for legal goods and services.”
The bill was welcomed by the founder of the local crypto mining business Megawatt.
Ilya Rekhter, who operates mining facilities in rural areas across the state, said the legislation would help prevent a sudden change in zoning laws after a business has already invested money in a facility, Rekhter said.
“We’re not asking for any special treatment,” he said, “just the same treatment.”
The committee won’t hold a vote on the bill until January.
Contact breaking politics reporter Marissa Meador at mmeador@gannett.com or follow her on X @marissa_meador.
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