Opening arguments in the criminal trial of two brothers allegedly responsible for using Maximum Extractable Value (MEV) robots to perpetuate a multimillion-dollar exploit began Wednesday.
Anton and James Peraire-Bueno appeared in a New York courtroom as U.S. attorneys and defense attorneys presented different narratives around the alleged crypto scheme, which resulted in the removal of approximately $25 million.
According to an Inner City Press article, U.S. government lawyers claimed the brothers “deceived their victims” by committing a “high-speed bait and switch.” However, defense lawyers said “the victims here were sandwich robots”, adding that the Peraire-Bueno duo used a business strategy and claimed the profits were not illegal and therefore there was no money laundering associated.
“Yes, they circumvented the cryptography,” the brothers’ defense attorney, Katherine Trefz, said during opening arguments. “They imported it into the United States and paid taxes on it: $6 million. Before being arrested at their home. It’s a complicated case.”
The alleged April 2023 Ethereum blockchain exploit followed months of preparation by targeting accounts that used MEV bots, researching potential penalties for misconduct, and analyzing the code. US authorities arrested the two men in May 2024.
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The brothers each face conspiracy charges to commit wire fraud, money laundering and conspiracy to receive stolen property, potentially allowing a judge to sentence them to up to 20 years in prison on each count if convicted.
Many industry experts are monitoring the trial to determine its potential impact on the Ethereum network.
“I’m ready to change my mind, but it seems [like a] quite a gray area for me”, said Evan Van Ness, chief investment officer of crypto firm TXPool Capital, shortly after the brothers’ arrest in May 2024. “Many MEV operators embrace the mantra ‘all’s fair in love and MEV’. And the brothers literally sandwiched attackers?”
“I think the accusations make sense” said Dankrad Feist, researcher at the Ethereum Foundation, in response to Van Ness. “They exploited a bug in a system for their own gain. Just because it’s a permissionless system doesn’t mean it now exists [sic] rules. The code is not the law.
The lawsuit was pending in the U.S. District Court for the Southern District of New York at the time of publication. The two brothers have been out on bail since May 2024.
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