Blockchain scammers used MEV bot scheme to extract maximum profits
Brothers Anton and James Perire-Bueno, who studied computer science and mathematics at the Massachusetts Institute of Technology (MIT), were arrested Wednesday in connection with an innovative scam using bots to extract maximum value (MEV) on the Ethereum blockchain. . According to the indictment, in 12 seconds they illegally enriched themselves by $25,000,000.
Federal prosecutors in Manhattan have characterized the actions of Anton, 24, and James, 28, as a «innovative fraud», undermining the integrity of the Ethereum blockchain. The brothers are charged with conspiracy to commit fraud and money laundering.
According to the investigation, for several months the Peraire-Buenos carefully planned to manipulate and forge the protocols used to verify transactions on the Ethereum blockchain. They used the MEV-boost middleware, widely used by «validators» networks to verify new transactions.
The cabal deployed a number of Ethereum validators, placed decoy transactions for MEV bots, and then used a vulnerability in MEV-boost to perform premature escrow (temporarily reserving cryptocurrency funds on the blockchain as part of the transaction process). After the successful heist, the brothers allegedly rejected requests for the return of stolen crypto assets and took steps to launder and hide them.
The arrest comes shortly after the US Securities and Exchange Commission (SEC) requested comments on three Ethereum spot exchange-traded fund proposals submitted by Grayscale Investments, Fidelity and Bitwise back in early April .