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Two MIT-educated brothers are facing federal charges for allegedly orchestrating a cryptocurrency fraud that stole approximately $25 million from Ethereum (ETH) traders.
James and Anton Peraire-Bueno are accused of exploiting bots that profit from cryptocurrency trades by setting up small, risky trades to lure them – then using a flaw in the Ethereum network to rearrange the trades and take the profits for themselves, reports Bloomberg.
Court filings identify the brothers’ primary alleged victim as Savannah Technologies, a little-known Israeli firm.
Its CEO, David Yakira, is expected to testify for the prosecution about how the company lost $13 million when the brothers targeted its trading bots.
The brothers have pleaded not guilty, and the most serious fraud charge has a maximum penalty of 20 years in prison.
Prosecutors are presenting the case as a straightforward theft, highlighting the brothers’ actions for the jury.
To demonstrate criminal intent, they reportedly plan to reference Anton’s alleged web searches asking whether “prison or jail worse” and “where do criminals keep dollars.”
The defense argues that their actions were legal within the largely unregulated crypto market and that the trading bots themselves engage in similar practices.
