Two brothers from the Massachusetts Institute of Technology are standing trial in Manhattan federal court this week, accused of pulling off a $25 million cryptocurrency theft.
According to a report from Bloomberg, James and Anton Peraire-Bueno, aged 29 and 25, allegedly exploited a flaw in the Ethereum blockchain to outsmart automated trading bots in 2023. Prosecutors say the pair used their coding skills to manipulate transactions in what’s known as Maximal Extractable Value, or MEV, a practice often called the “Wild West” of crypto trading.
The case began Wednesday with opening arguments, promising to shed light on one of the most secretive corners of the digital finance world. The brothers are accused of luring automated “sandwich attack” bots into bad trades, then reordering blockchain transactions to take their profits. Both men have pleaded not guilty, saying their actions were part of fair and open competition in an unregulated market.
Their main alleged victim is Savannah Technologies, an Israeli crypto trading firm. Prosecutors say Savannah lost about $13 million when its bots were tricked by the brothers’ scheme. Savannah’s chief executive, David Yakira, is expected to testify about how the firm’s systems were fooled. Lawyers for the brothers, Yakira, and Savannah have all declined to comment publicly on the case.
According to court filings, the Peraire-Bueno brothers studied the behavior of these trading bots and found a weakness in MEV Boost, an open-source software used by Ethereum operators. This allowed them to see and reorder pending transactions to their advantage. Prosecutors described the case as “straightforward theft,” while the defense insists the funds were “voluntarily traded away.”
The government also claims Anton searched online for phrases like “prison or jail worse,” suggesting awareness of possible wrongdoing. Judge Jessica Clarke has allowed the defense to call expert witnesses about MEV, provided they do not “blame the victim.”
Evan Van Ness, chief investment officer at TXPool Capital, said, “If people think crypto is the Wild West, MEV is the Wild West of crypto.” Another blockchain expert, Matt Cutler, said the brothers “tricked someone into doing a sandwich that should’ve been safe by the rules of the network.”
The trial could set new boundaries for crypto trading practices. Many in the industry are watching closely to see whether it defines the line between clever coding and criminal conduct.