Coin Center Challenges Legal Theories in Ethereum Exploit Trial

According to Cointelegraph, cryptocurrency advocacy group Coin Center has intervened in the criminal trial of Anton and James Peraire-Bueno, who are accused of exploiting the Ethereum blockchain using maximal extractable value (MEV) bots. In an amicus curiae brief filed on Monday, Coin Center contested a key theory presented by prosecutors, who allege the brothers orchestrated a $25 million MEV exploit in April 2023. Coin Center argues that the U.S. government's claims of 'honest validation' lack substance and should be dismissed by the court. The organization emphasized that 'honest validation' within cryptocurrency communities is a mathematical verification rather than a legal or normative judgment. Coin Center stated that the defendants did not violate any explicit rules or controls within the Ethereum protocol that would warrant external interference or enforcement. The brief criticized the prosecution's attempt to impose a new code of conduct on top of existing protocol rules, arguing that such actions would be unjustified and detrimental if pursued through criminal prosecution. The amicus brief was submitted on the 14th day of the Peraire-Buenos' trial, amidst opposition from U.S. prosecutors who argued that Coin Center's involvement might sway the jury towards acquittal based on policy arguments rather than legal grounds. The case revolves around the MEV bot exploit, where a validator manipulates transaction order within a block to maximize profits. The trial's outcome could have significant repercussions for cryptocurrency traders and platforms. Inner City Press reported that U.S. government lawyers plan to argue that the defendants misrepresented themselves as 'honest validators' to facilitate the exploit. Coin Center's brief countered this by stating that 'honest' validation in the Ethereum ecosystem simply means adhering to the consensus rules outlined in the protocol software. The organization warned that adopting the prosecution's 'honest validator' fraud theory would contradict industry practices and established legal principles of harm without legal injury and fair notice. Defense attorneys have dismissed the prosecution's theory as a 'nonsensical allegation,' asserting in their opening statements that the 'victims here were sandwich bots.' The brothers face charges of conspiracy to commit wire fraud, money laundering, and conspiracy to receive stolen property. If convicted, they could each face up to 20 years in prison for each count.