Cyber attack

U.S. authorities arrested and charged a pair of brothers for allegedly hacking the ethereum blockchain and stealing US$25 million worth of cryptocurrency.

The U.S. attorney’s office for the Southern District of New York unsealed an indictment accusing the pair — Anton Peraire-Bueno and James Peraire-Bueno — of manipulating the processes used to validate transactions on the blockchain.

Authorities say the brothers gained access to pending transactions, and stole approximately US$25 million from crypto traders in a 12-second meticulously planned attack.

“Among other things, they learned the trading behaviours of the victim traders whose cryptocurrency they ultimately stole,” the U.S attorney’s office said. “As they planned the exploit, 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.”

They have been charged with wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. The allegations have not been proven, and they are presumed to be innocent.

“As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of ethereum users across the globe,” said U.S. attorney Damian Williams in a release.

“Once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged,” he added.