A spectacular crackdown in the United States led to the arrest of two brothers accused of manipulating the Ethereum blockchain and stealing $25 million in cryptocurrencies. This case, described as unprecedented by the authorities, shows that this technology still has flaws.
The rise of virtual currencies takes up more and more space in the financial systems worldwide. They offer new investment opportunities and their acceptance is growing, particularly with the recent introduction of Bitcoin ETFs which mark a deeper integration into traditional systems. However, while cryptocurrencies are no longer popular among criminals due to the increased traceability and reinforced regulationsTHE risks persist. Regulators and law enforcement must constantly keep pace with innovators, sometimes dishonest, who exploit flaws in the system to their advantage.
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In this context, Anton and James Pepaire-Bueno, two brothers who studied at the prestigious Massachusetts Institute of Technology (MIT), in the United States, were arrested in Boston and New York. They are accused of having manipulated transaction validation processes on the Ethereum blockchain. They were thus able to orchestrate a lightning flight which led to a hijacking of $25 million – or around 23 million euros – in cryptocurrencies.
These two mathematical geniuses risk 20 years in prison
According to the prosecution, the Pepaire-Bueno brothers allegedly used advanced skills in computer science and in mathematics to alter pending transactions on the blockchain. They targeted a specific flaw in the code of MEV-Boost, a mechanism that optimizes transaction selection. By exploiting this vulnerability, they managed to reorder a block of transactions to their advantage and we were thus able siphon user funds without suspicion in just a few seconds.
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Their strategy included the use of shell companies and multiple cryptocurrency addresses to hide their identity and the origin of the stolen funds. The investigation, led by the IRS Cyber Criminal Investigation Unit with assistance from the New York Police Department and U.S. Customs and Border Protection, exposed the ingenuity and complexity of their fraudulent scheme. If convicted, both brothers could face a maximum sentence of 20 years in prison for each count.
Source: bleepingcomputer