A U.S. federal judge has declined to dismiss wire fraud charges against MIT graduates Anton and James Peraire-Bueno, accused of orchestrating a $25 million exploit targeting Ethereum Maximal Extractable Value (MEV) bots. This ruling establishes a significant legal precedent, affirming that traditional federal fraud statutes apply to novel exploits within blockchain protocols.
Prosecutors allege the brothers executed a complex scheme to steal cryptocurrency by manipulating MEV bots. According to court documents, they deceived bots using fabricated ‘lure transactions’ and strategically controlled 16 Ethereum validators funded with 529.5 ETH. This sophisticated manipulation reportedly allowed them to capture the $25 million in value within a mere 12 seconds.
The defense argued that the brothers’ actions, while costly for victims, constituted a legitimate exploit permissible under the blockchain’s inherent code and rules, not traditional fraud requiring deception of identifiable victims. Prosecutors countered that the deliberate deception of the MEV bots through false transactions clearly violated federal wire fraud statutes, regardless of the technological context.
The judge sided with prosecutors, ruling that the alleged actions met the criteria for wire fraud by exploiting systems designed to operate in good faith. This decision rejects the ‘code is law’ defense in this instance.
The case is now scheduled to proceed to trial later this year. The outcome carries profound implications for how regulators, law enforcement, and stakeholders in the cryptocurrency industry perceive the legality of sophisticated on-chain exploits.