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HomeNewsDOJ Cracks Down on Ethereum Fraud: $25 Million Stolen by Two Brothers

DOJ Cracks Down on Ethereum Fraud: $25 Million Stolen by Two Brothers

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  • The U.S. DOJ arrested Anton and James Peraire-Bueno for fraud and money laundering involving $25 million.
  • The brothers manipulated Ethereum blockchain protocols, diverting cryptocurrency in a mere 12 seconds.

The Department of Justice has confirmed the detention of two siblings, 24-year-old Anton Peraire-Bueno of Boston and 28-year-old James Peraire-Bueno of New York. They are charged with conspiracy to commit wire fraud and engaging in money laundering activities. The brothers were taken into custody on accusations of manipulating the Ethereum blockchain, which allegedly led to them wrongfully obtaining $25 million in crypto.

The operation that led to the misappropriation of funds lasted only 12 seconds

During this brief period, the brothers reportedly manipulated the transaction validation protocols of the Ethereum blockchain. This allowed them to redirect large amounts of cryptocurrency to their control. 

Damian Williams, the U.S. Attorney for the Southern District of New York, described the act as a calculated and technically sophisticated scheme, noting the brothers’ use of their extensive education in computer science and mathematics.

Read more: How MetaMask’s Smart Transactions are Saving Ethereum Users Millions

The preparation for this scheme spanned several months, during which the brothers analyzed trading patterns and implemented strategies to conceal their identities. These strategies included establishing fake companies, using anonymous cryptocurrency addresses, and transferring the stolen funds through international exchanges.

The press release stated, “And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged. 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.”

This case represents a unique challenge to the legal system due to its technical complexity and the swift nature of the crime. Despite this, the prosecution stressed its dedication to maintaining the integrity of financial systems against such sophisticated threats.

Following the event, the New York Field Office of the IRS Criminal Investigation acted swiftly to probe the alleged blockchain manipulation. They utilized a mix of cutting-edge technology and established investigative techniques to trace the misdirected funds.

Thomas Fattorusso, the Special Agent in Charge, highlighted the effectiveness of blending modern technology with proven investigative techniques in solving the case.

An IRS special agent said, “In this case, IRS-CI New York’s Cyber Unit simply followed the money. Regardless of the complexity of the case, we continue to lead the effort in financial criminal investigations with cutting-edge technology and good-ole-fashioned investigative work, on and off the blockchain.” 

The IRS emphasized their methodical approach to financial investigations, which includes tracing money flows to uncover criminal activities. Their efforts underline the commitment to thorough investigation, regardless of the intricacies involved.

Should Anton and James Peraire-Bueno be convicted, they face the possibility of up to 20 years in prison for each offense. It is alleged that they tried to hide their unlawful actions by investigating cryptocurrency exchanges with lax identity checks and consulting lawyers on how to evade prosecution for cryptocurrency-related offenses.

Anton and James Peraire-Bueno are set to appear in court before U.S. Magistrate Judges in Massachusetts and New York, where the legal proceedings will continue to unfold, providing further examination into both the technical details of blockchain manipulation and the corresponding legal implications.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: info@ethnews.com Phone: +49 160 92211628
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