As technical education goes, few American institutions can match the prestige and influence of MIT. Of course, not every graduate is destined for greatness, as two MIT alums made clear earlier this year when they got busted for allegedly pulling a lightning-fast crypto heist, making off with an estimated $25 million.
The duo — two brothers named Anton and James Peraire-Bueno — were recently indicted in a federal court on charges of conspiracy, wire fraud, and money laundering in what prosecutors call a “first-of-its-kind” financial crime, according to Business Insider.
In the opening phase of the trial which kicked off this week, prosecutors described the heist as a “enormous bait-and-switch” using automatic trading bots to snare other bots into a fraudulent transaction. In essence, the government alleges, the brothers exploited a software flaw to sucker crypto bots into dumping millions into their fraudulent currency.
“In 12 seconds, the defendants tricked their victims out of $25 million,” Federal Assistant Attorney Ryan Nees told jurors. “The defendants’ goal was to rip other people off,” he continued, adding that the brothers “laughed about tricking their victims into buying sh**coins based on their scam bait.”
Before pulling off the scheme, BI reports, the duo made sure to cover their bases on Google, where they searched “how to wash crypto,” “top crypto lawyers,” “fraudulent Ethereum addresses database,” and — just for good measure — “money laundering statue [sic] of limitations.”
The pair were arrested earlier in May, after a two year federal investigation revealed a months-long plot to manipulate protocols used to validate transactions on the Ethereum blockchain, a cryptocurrency second only to Bitcoin by total market cap.
Peraire-Bueno’s attorneys, meanwhile, argue that because the blockchain is an “unregulated market,” the duo were simply deploying a novel trading strategy in a financial environment where “economic incentives guide parties’ behavior.” According to Decrypt, defense attorney Patrick Looby asserts there’s “no central authority” or “government regulations” overseeing the Ethereum blockchain — the entire draw of cryptocurrency in the first place.
Given the stakes involved, the case is likely to set major legal precedent, deciding the limits — or lack thereof — on the US government’s authority to regulate a crypto market currently worth over $3.5 trillion dollars.
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