Crypto
Mistrial declared for MIT-educated brothers accused of $25M cryptocurrency heist | Massachusetts Lawyers Weekly
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)
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Scam so convincing victim ignores police, puts thousands into Cryptocurrency ATM
WESTLAKE, Ohio (WJW) — Police in Westlake said a computer scam artist was so convincing in the story he pitched to an elderly victim that she put thousands of dollars into a Cryptocurrency ATM, even after store employees and officers pleaded with her to stop.
On Nov. 26, police were alerted by an employee at a Marathon convenience store on Center Ridge Road that a 71-year-old woman was feeding a large amount of cash into a Bitcoin ATM, while speaking with someone on her cell phone. The employee warned the woman that it appeared she was the target of a scam, but she refused to listen and kept pumping money into the machine.
On body camera video obtained by Fox 8 News, an officer approached the woman and told her, “We deal with this all the time, stop what you’re doing, I’m telling you, stop. If somebody tells you to do this, you are being scammed.” The woman responded, “They’re on the phone; they can hear everything.” The officer then told her, “Right, and they’re scamming you.”
However, the 71-year-old ignored repeated warnings from officers, after being persuaded by a scammer posing as a bank fraud investigator, that she needed to put $18,000 into the crypto machine, or risk having her life savings stolen from her account.
The officer told her, “Stop what you’re doing, you’re going to lose this money. They’re lying to you; that’s not how it works, I promise you. They’re lying, they don’t tell you to go to a gas station and go buy Bitcoin, I’m telling you, you should stop what you’re doing.”
Officers eventually convinced the woman to stop putting cash into the ATM, but not before she lost $5,500.
The victim later told investigators the elaborate scam began earlier that day, when she received a pop-up message on her computer, indicating it was infected with a virus. A number was provided to get help, which put her in the clutches of the scam artist.
WPD Captain Jerry Vogel told Fox 8, “She sees the pop-up, so she knows that there is an issue. Unfortunately, now the scammers use that and say, ‘Hey, it looks like maybe someone has been planting pornography or some other illicit material on your computer, you’re going to be in some trouble if you don’t get this money out of your bank and put it into a crypto machine.”
The scammer told the victim that bank employees would ask her questions about why she was taking out so much money from her account. He even gave her a story to tell, which was that she needed the cash to buy a car.
The woman told detectives, “He said, ‘Do this, do that, go here, go there.’” The final piece of the scam came when the con artist sent a QR code to the victim’s phone, which she used to direct the funds loaded into the ATM to his crypto account.
“They weave these stories so well that the victims really believe they need to do this immediately,” said Captain Vogel.
While there is no guarantee the victim will be able to recover the money she put into the ATM, detectives were able to use new technology to immediately freeze the crypto wallet being used by the scammer. It’s part of an ongoing battle between law enforcement and cyber criminals.
According to Captain Vogel, “We take one step forward, they take another step forward, so it’s a cat and mouse game.”
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