Monthly Archives: May 2024

TheDepartment of Justice(DOJ) announced the unsealing of anindictment Wednesday (May 15) charging two brothers with crimes resulting from an alleged cutting-edge scheme in which they stole $25 million worth of cryptocurrency from the ethereum blockchain.

Anton Peraire-Bueno, 24, of Boston, and James Peraire-Bueno, 28, of New York, were arrested Tuesday (May 14) and charged Wednesday with conspiracy to commit wire fraud, wire fraudandconspiracy to commit money laundering, the DOJ said in a Wednesdaypress release.

As alleged in todays indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds, Deputy Attorney GeneralLisa Monaco said in the release. Unfortunately for the defendants, their alleged crimes were no match for Department of Justice prosecutors and IRS agents, who unraveled this first-of-its-kind wire fraud and money laundering scheme.

The indictment alleges that the defendants tampered with the process and protocols by which transactions are validated and added to the ethereum blockchain, gained access to pending private transactions, altered certain transactionandobtained their victims cryptocurrency, according to the release.

Following the theft, the defendants received requests to return the stolen cryptocurrency but instead kept it and took steps to hide it, the release said.

Before, duringandafter they did these things, the defendants searched online for information about how to carry them out, how to conceal their involvementandhow to launder the criminal proceeds, per the release.

If convicted, they face a maximum penalty of 20 years in prison for each count, according to the release.

As we allege, the defendants scheme calls the very integrity of the blockchain into question,Damian Williams, U.S. attorney for the Southern District of New York, whose office indicted the brothers, said in the release.

Blockchain data firmChainalysissaid in February that illicit addresses sent $22.2 billion worth of cryptocurrency to services in 2023, down from the $31.5 billion sent in 2022.

The firm attributed this decline incrypto money launderingto reduced crypto activity, as there was an overall decrease in crypto transaction volume.

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DOJ Charges 2 Brothers With Scheme to Steal Cryptocurrency - PYMNTS.com

By Nate Raymond

BOSTON (Reuters) - Two brothers who studied at the Massachusetts Institute of Technology were arrested on Wednesday on U.S. charges that they carried out a cutting-edge scheme to exploit the Ethereum blockchain's integrity and steal $25 million worth of cryptocurrency.

Federal prosecutors in Manhattan called the scheme perpetrated by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, "novel" and said the case marked the first time that such a fraud had ever been the subject of U.S. criminal charges.

Authorities said they executed their elaborate heist in April 2023, stealing $25 million from traders in just 12 seconds by fraudulently gaining access to pending transactions and altering the movement of cryptocurrency.

"As we allege, the defendants' scheme calls the very integrity of the blockchain into question," U.S. Attorney Damian Williams said.

An indictment charged them with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Anton Peraire-Bueno was arrested in Boston, while James Peraire-Bueno was arrested in New York.

Their lawyers did not immediately respond to requests for comment.

Both brothers had attended Cambridge, Massachusetts-based MIT, where according to prosecutors they studied computer science and math and developed the skills and education they relied upon to carry out their fraud.

The indictment alleged 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.

Prosecutors said 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 that after carrying out the heist, the brothers rejected requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency.

(Reporting by Nate Raymond in Boston; Editing by Bill Berkrot)

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US charges two brothers with novel $25 million cryptocurrency heist - AOL

Two brothers who studied at the Massachusetts Institute of Technology were arrested on Wednesday on US charges that they carried out a cutting-edge scheme to exploit the Ethereum blockchains integrity and steal $25 million worth of cryptocurrency.

Federal prosecutors in Manhattan called the scheme perpetrated by Anton Peraire-Bueno, 24, and James Peraire-Bueno, 28, novel and said the case marked the first time that such a fraud had ever been the subject of US criminal charges.

Authorities said they executed their elaborate heist in April 2023, stealing $25 million from traders in just 12 seconds by fraudulently gaining access to pending transactions and altering the movement of cryptocurrency.

As we allege, the defendants scheme calls the very integrity of the blockchain into question, US Attorney Damian Williams said.

Anindictmentcharged them with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Anton Peraire-Bueno was arrested in Boston, while James Peraire-Bueno was arrested in New York.

Their lawyers did not immediately respond to requests for comment.

Both brothers had attended Cambridge, Massachusetts-based MIT, where according to prosecutors they studied computer science and math and developed the skills and education they relied upon to carry out their fraud.

The indictment alleged 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.

Prosecutors said 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 that after carrying out the heist, the brothers rejected requests to return the funds and instead took steps to launder and hide the stolen cryptocurrency.

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MIT-educated brothers allegedly stole $25M in crypto in just 12 seconds - New York Post

Two brothers accused of orchestrating an attack last year on Ethereum trading bots have been indicted by the US government.

The Department of Justice unsealed charges against Anton Peraire-Bueno and James Peraire-Bueno on Wednesday.

The pair are charged with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering after the brothers allegedly tried to exploit the very integrity of the Ethereum blockchain to fraudulently obtain approximately $25 million worth of cryptocurrency within approximately 12 seconds.

Both were arrested on Tuesday and will face judges in Massachusetts and New York.

The April 2023 exploit targeted bots that seek profit by essentially trying to front-run transactions on the network. Maximum extractable value, or MEV, referring to the maximum value that can be obtained during transaction block production beyond rewards and fees.

Read more: Ethereum Validator Goes Rogue, Frontruns MEV Bots for $25M

The Peraire-Bueno brothers sought to lure MEV bots from the traders they allegedly targeted by proposing at least eight specific transactions thatthe defendants knew would cause the targeted bots to include the lure transactions in the bundles, the indictment said. The exploit took advantage of a since-patched code vulnerability in the MEV-Boost software.

In each of these eight bundles, the victim traders effectively bought substantial amounts of particularly illiquid cryptocurrenciesfor approximately $25 million of various stablecoins.

Through the Exploit, which is believed to be the very first of its kind, Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims cryptocurrency, a DOJ press release said.

To avoid detection, the two tried to conceal their identities through shell companies and private crypto addresses.

Following the attack, the brothers even transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.

They researched know-your-customer (KYC) procedures online, per the indictment, to learn the KYC standards and extradition procedures. They allegedly also researched the crimes theyd end up being charged with.

As alleged in todays indictment, the Peraire-Bueno brothers stole $25 million in Ethereum cryptocurrency through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds, said Deputy Attorney General Lisa Monaco.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

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DOJ charges 2 brothers tied to $25M attack on MEV bots last year - Blockworks

Federal prosecutors say the pair of brothers manipulated Ethereum's blockchain to steal $25 million in cryptocurrency.

MANHATTAN (CN) Two brothers were indicted Wednesday under accusations they executed a scheme to steal $25 million in cryptocurrency in just 12 seconds.

Federal prosecutors claim the brothers, Anton Peraire-Bruno and James Peraire-Bruno, used their educational backgrounds in mathematics and computer science to manipulate and tamper with transactions added to the Ethereum blockchain one of the most popular public accounting ledgers in the crypto market.

They face charges to commit wire fraud and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years if they are found guilty.

According to prosecutors, the brothers heist was the first of its kind.

This alleged scheme was novel and has never before been charged, U.S. Attorney for the Southern District of New York Damian Williams said in a statement Wednesday. But as the indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this office will be relentless in pursuing people who attack the integrity of all financial systems.

The theft was executed on the Ethereum network, a decentralized blockchain in which more than one million daily transactions from across the world are conducted each day.

These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of electronic currency and ultimately stealing $25 million in cryptocurrency from their victims, Thomas Fattorusso, the special agent in charge of the New York Field Office of the Internal Revenue Service-Criminal Investigation Unit, said in a statement Wednesday. In this case, IRS-CI New Yorks Cyber Unit simply followed the money.

Prosecutors say the Peraire-Bruno brothers gained access to pending private transactions and obtained their victims cryptocurrency. Once they stole the cryptocurrency, they rejected requests from the victims to return it.

And once they put their plan into action, their heist only took 12 seconds to complete, Williams said.

According to U.S. Attorneys, the brothers learned the trading behaviors of their victims and took numerous other steps to prepare for the theft over the course of several months.

They also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges, prosecutors say in the indictment.

After they stole the funds, prosecutors claim the brothers transferred the cryptocurrency through a series of transactions designed to conceal its source and ownership.

Prosecutors also point to the brothers internet search history and claim they looked for information about how to carry out the theft and how to hide their involvement, as well as for attorneys with expertise in cryptocurrency cases and extradition procedures.

The brothers were arrested in Boston and New York, respectively. The case is being handled by the U.S. Attorneys Offices Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla are heading the prosecution.

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Brothers indicted for 'first-of-its-kind' cryptocurrency heist - Courthouse News Service

The team behind the cryptocurrency lending protocol Sonne Finance is offering a hacker an undisclosed bounty following a $20 million theft on Tuesday evening.

Sonne Finance allows people to lend and borrow funds without the need for intermediaries such as banks. Several blockchain security companies tracked more than $20 million flowing out of the system on Tuesday evening in digital coins such as ether, the U.S.-dollar-backed USDC and others.

The developers confirmed that they had paused all markets and later published a postmortem on the attack explaining that the attacker was able to exploit the protocol for ~$20 million.

We are ready to give bounty to exploiter as well as not to commit pursuing the issue further, in case of returning the funds, Sonne Finance said, noting that it is in contact with anyone that can help with recovering the funds.

They discovered the attack within 25 minutes of it being executed, and some users were able to save about $6.5 million from being stolen through technical maneuvers.

Since the attack, the hacker has been swapping the stolen cryptocurrency for bitcoin and other coins in a flurry of transactions.

Law enforcement scrutiny of crypto thefts and the transfer to stolen funds has increased significantly in 2024, with several high profile market manipulators and operators facing charges.

Last month the man behind a $110 million theft from popular crypto platform Mango Markets was convicted in a federal court and is facing up to 30 years in prison.

A Bulgarian woman behind a crypto scam also was given a four-year sentencein April and the cofounder of anonymizing cryptocurrency service Tornado Cash will spend about five years in prison following a conviction on Tuesday in the Netherlands.

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Jonathan Greig

is a Breaking News Reporter at Recorded Future News. Jonathan has worked across the globe as a journalist since 2014. Before moving back to New York City, he worked for news outlets in South Africa, Jordan and Cambodia. He previously covered cybersecurity at ZDNet and TechRepublic.

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Sonne Finance developers offer bounty to hacker behind $20 million crypto theft - The Record from Recorded Future News

As Nathaniel Hawthorne wrote in the1800s, families are always rising and falling in America.

And the same holds true for the cryptocurrency and Web3 space in 2024.

Thats because, whether it is the sectors market valuation, or education and acceptance around Web3 technologies, or even the promised land of scalable usability, the journey from an arms-length distancing of crypto to a potential embrace of blockchain-based solutions has had its fair share of ups and downs in the decade and a half since bitcoin first emerged on the scene in 2009.

But while awareness, acceptance and adoption are all crucial in driving the evolution of cryptocurrency, it is two other critical factors that will determine cryptos success: its usability anditsutility particularly across payment ecosystems.

Underpinning those two factors, of course, is the elephant in the room of establishing a productive regulatory framework to govern Web3.

This, as the past week brought with it a basket of news all showing that the ice around cryptos regulatory and usability woes would potentially be thawing. Thats why, from legal moves to fundraises, to payments use cases and beyond, these are the top stories around the Web3 landscapethat PYMNTS has been tracking for the past week.

Read more: Making Sense of the State of Crypto in 2024

The crypto community is playing politics to win, with the 440,000 member-strong nonprofit groupStand With Cryptoreportedly forming a political action committee (PAC) to support candidateswho arefriendly to cryptocurrency and blockchain.

The new PAC aims to raise money from Stand With Cryptos nearly half a million members, and it comes against a backdrop where the crypto sectorssuper PACshave become one of the top three fundraisers in the 2024 election cycle.

The crypto industry is hoping that a friendlier and more educated group of lawmakers could finally push through a regulatory framework for cryptocurrencies.

And on Friday (May 10), that goal got one step closer to the finish line, as a bill that promises regulatory clarity for digital assets has moved a step closer to a vote in the U.S. House.

TheHouse Committee on Rulessaid Friday that it will consider theFinancial Innovation and Technology for the 21st Century (FIT21) Act(H.R. 4763), which means the bill could go to a floor vote later in May, theHouse Financial Services Committeesaid.

FIT21 would delineate when acryptocurrencyis a commodity or security and assign oversight appropriately between the CFTC and the SEC.

But that wasnt the only legal news in Web3 this week. As it prepares to go public, stablecoin issuerCircleis reportedly also planning to transfer itslegal basefrom Ireland to the United States, as reported Wednesday (May 15).

While on Monday (May 13), U.S. President Biden issued an order blocking a Chinese-backed cryptocurrency mining firm from owning land near an American nuclear missile base, citing the mining firms proximity to the military base as a national security risk.

After all, crypto does have its perils. North Korea laundered $147.5 million through virtual currency platform Tornado Cash in March after stealing it last year from a cryptocurrency exchange, per a report Tuesday (May 14).

Its important to know that crypto is not just bitcoin and Doge and NFTs,Sheraz Shere, head of payments atSolana Foundation, told PYMNTS on Monday. Blockchains are really alternative rails for payments and financial assets.

Theres a lot of misconceptions with people in the financial services industry about compliance andregulation,and that they wouldnt want to touch blockchain with a 10-foot pole, Shere added. And I think in the past that may have been true, but there are a whole new set of protocol-level controlsthat exist nowthat provide even more fine-grain control that you often have with traditional financial rails.

In the conversation with PYMNTS, he stressed the need for crypto players and enterprise businessesaliketo focus on real-world use cases, such as cross-border payments, where blockchain solutions offer advantages over traditional systems.

Another use case for the blockchain being experimented with is the use of its immutable ledger for recording and storing digital identities. Humanity Protocol, a startup that aims to verify peoples online identities using scans of their palms, has raised $30 million at a $1 billion valuation, per a Wednesday report.

Still, for the everyday retail investor, the recent surge in bitcoin prices has the phones at crypto wallet recovery firms ringing off the hook, according to a Thursday report, as investors locked out of their Web3 wallets try to regain access and capture the market surge.

The market surge is resulting in a rash of new coins, as there were nearly 1 million new crypto tokens created in the last month, a number that is 2x the total number ever made on Ethereum from 2015-2023.

And PYMNTS wrote in March about how representatives of fraudulent businesses claiming to provide cryptocurrency tracing and promising an ability to recover lost funds are turning to social media and other messaging platforms to contact victims directly about solving their lost assets.

These recovery scheme fraudsters charge an up-front fee and either cease communication with the victim after receiving an initial deposit, or produce an incomplete or inaccurate tracing report and request additional fees to recover funds. Fraudsters may claim affiliation with law enforcement or legal services to appear legitimate.

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This Week in Web3: Crypto Payment Rails and Regulatory Clarity - PYMNTS.com

Leading financial analyst Raoul Pal gave a bold prediction for thefuture of the cryptocurrency market.He predicted that the cryptocurrency market would boom in the coming yearsleadingto a market cap worth trillions.

During an analysis in The Everything Code,Pal gaveouta bold forecast explaining that the cryptocurrency market will gain a market cap of $100 trillion.

Also Read: Currency: What To Expect From The US Dollar Today

The analyst explained the macroeconomic trends that shaped the global financial sector after the 2008 crisis. According to Pal, every downward cycle propels technology stocksfirstas they are instrumental in shaping the future of the markets. He cited that cryptocurrencies are technology-based and the next downturn willpropelthem to new heights post-recovery.

Palunderpinned observationsthat the technology sector gains the most after a market crash. He explained that the cryptocurrency market is the firstin lineto benefit from a downturn as its technology is new and unexplored.

Also Read: Nvidia Stock Prediction:What Will Its Price Be in 2025?

Theexpertpredicted that if the cryptocurrency market gains a market cap of $2.5 trillion, the next stop is $100 trillion. Pal backed his prediction using Metcalfes Lawwhichfuels unprecedented levels of adoption.

According to him, the market will experience massive adoption after the next downturnwhichwill propelit to new highs.Even Chris Burniske, the former head of ARKInvestagreed to Raoul Pals bold and bullish forecast. Burniske said that he will not rule out Pals observations as a $100 trillion market cap for cryptocurrency is possible.

Also Read: GameStop: GME Forecasted to Reach $86; Heres When

ARK Invests Cathie Woodalsofirmly believes that Bitcoin could reach $1 million in the coming years. If that happens, the overall cryptocurrency market will boomleadingto several altcoins touching new highs in the charts. In conclusion, top industry insiders believethat thestage for the market to surge isbeing set.

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$100 Trillion Market Cap For Cryptocurrency Will Be a Reality: Analyst - Watcher Guru