MANHATTAN (CN) — Two brothers were indicted Wednesday under accusations they executed a scheme to steal $25 million in cryptocurrency in just 12 seconds.
Federal prosecutors claim the brothers, Anton Peraire-Bruno and James Peraire-Bruno, used their educational backgrounds in mathematics and computer science to manipulate and tamper with transactions added to the Ethereum blockchain — one of the most popular public accounting ledgers in the crypto market.
They face charges to commit wire fraud and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years if they are found guilty.
According to prosecutors, the brothers’ heist was the first of its kind.
“This alleged scheme was novel and has never before been charged,” U.S. Attorney for the Southern District of New York Damian Williams said in a statement Wednesday. “But as the indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this office will be relentless in pursuing people who attack the integrity of all financial systems.”
The theft was executed on the Ethereum network, a decentralized blockchain in which more than one million daily transactions from across the world are conducted each day.
“These brothers allegedly committed a first-of-its-kind manipulation of the Ethereum blockchain by fraudulently gaining access to pending transactions, altering the movement of electronic currency and ultimately stealing $25 million in cryptocurrency from their victims,” Thomas Fattorusso, the special agent in charge of the New York Field Office of the Internal Revenue Service-Criminal Investigation Unit, said in a statement Wednesday. “In this case, IRS-CI New York’s Cyber Unit simply followed the money.”
Prosecutors say the Peraire-Bruno brothers gained access to pending private transactions and obtained their victims’ cryptocurrency. Once they stole the cryptocurrency, they rejected requests from the victims to return it.
“And once they put their plan into action, their heist only took 12 seconds to complete,” Williams said.
According to U.S. Attorneys, the brothers learned the trading behaviors of their victims and took numerous other steps to prepare for the theft over the course of several months.
“They also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges,” prosecutors say in the indictment.
After they stole the funds, prosecutors claim the brothers transferred the cryptocurrency through a series of transactions designed to conceal its source and ownership.
Prosecutors also point to the brothers’ internet search history and claim they looked for information about how to carry out the theft and how to hide their involvement, as well as for attorneys with expertise in cryptocurrency cases and extradition procedures.
The brothers were arrested in Boston and New York, respectively. The case is being handled by the U.S. Attorney’s Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Rushmi Bhaskaran and Danielle Kudla are heading the prosecution.
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