A New York jury was unable to reach a verdict in the trial of Anton and James Peraire-Bueno, the MIT-educated brothers charged with fraud and money laundering connected to a 2023 Ethereum blockchain exploit that resulted in the theft of $25 million in digital assets.
On Friday, U.S. District Judge Jessica Clarke declared a mistrial after jurors could not agree on whether to convict or acquit the brothers, according to Inner City Press.
The ruling followed a three-week trial in Manhattan federal court, during which prosecutors and defense attorneys presented conflicting accounts of the Peraire-Buenos’ alleged involvement with maximal extractable value (MEV) bots.
A maximal extractable value (MEV) attack occurs when traders or validators manipulate the order of blockchain transactions for profit. Using automated MEV bots, they can front-run or sandwich other trades by paying higher fees to gain priority.
In the case of Anton and James Peraire-Bueno, prosecutors allege the brothers used MEV bots to “trick” users into trades. While the exploit reportedly took just 12 seconds to net them $25 million in cryptocurrency, prosecutors claim the brothers spent months planning it.
During closing arguments, prosecutors described the scheme as a “bait and switch,” saying the brothers “tricked” and “defrauded” users to extract roughly $25 million. They highlighted evidence that the pair had meticulously plotted their moves and considered the potential consequences.
“Ladies and gentlemen, bait and switch is not a trading strategy,” prosecutors told the jury Tuesday, according to Inner City Press. “It is fraud. It is cheating. It is rigging the system. They pretended to be a legitimate MEV-Boost validator.”
The Peraire-Buenos’ defense team countered, rejecting the government’s assertion that the brothers posed as “honest validators” to siphon funds, though the court allowed the argument to be presented to the jury.
“This is like stealing a base in baseball,” the defense argued Tuesday. “If there’s no fraud, there’s no conspiracy, there’s no money laundering.”
Implications for the crypto industry
Although the trial ended in a mistrial, the case has sparked debate within the crypto community over whether MEV-related activity could constitute a criminal offense. The legal and technical ramifications remain uncertain. Coin Center, a crypto advocacy organization, filed an amicus brief supporting the brothers’ position amid opposition from prosecutors.
“I don’t think what’s in the indictment constitutes wire fraud,” wrote Carl Volz, a partner at Gunnercooke, in an op-ed for DLNews on Monday. “A jury could decide differently, but if it does, it’ll likely be because the brothers Googled foolishly and spoke too freely with the wrong people.”
