Mistrial Declared in Ethereum Exploit Case Involving MIT-Educated Brothers

According to Cointelegraph, a New York jury was unable to reach a verdict in the case of Anton and James Peraire-Bueno, the MIT-educated brothers accused of fraud and money laundering related to a 2023 exploit of the Ethereum blockchain that resulted in the removal of $25 million in digital assets. U.S. District Judge Jessica Clarke declared a mistrial after jurors failed to agree on whether to convict or acquit the brothers following a three-week trial in Manhattan federal court. The case involved differing theories from prosecutors and the defense regarding the brothers' alleged use of maximal extractable value (MEV) bots. MEV attacks occur when traders or validators exploit transaction ordering on a blockchain for profit, often using automated bots to front-run or sandwich other trades by paying higher fees for priority. In this case, the brothers allegedly used MEV bots to deceive users into trades, executing the exploit in just 12 seconds to net $25 million. Prosecutors argued that the brothers engaged in a "bait and switch" scheme, extracting about $25 million in crypto, and presented evidence suggesting that the two had plotted their moves for months while researching potential consequences. "Ladies and gentlemen, bait and switch is not a trading strategy," prosecutors stated, emphasizing that it constituted fraud and system rigging. Defense lawyers countered the government's theory, arguing that the brothers did not pretend to be "honest validators" to extract funds. They likened the actions to "stealing a base in baseball," asserting that without fraud, there was no conspiracy or money laundering. Despite the mistrial, the case has sparked debate within the crypto industry about the legal and technical implications of treating MEV-related activity as a potential criminal offense. Crypto advocacy organization Coin Center filed an amicus brief opposing the prosecution's stance. Carl Volz, a partner at law firm Gunnercooke, expressed skepticism about the indictment's wire fraud claims, suggesting that a jury might conclude differently based on the brothers' actions and communications. This is a developing story, and further information will be added as it becomes available.