A federal court in Manhattan has dismissed the case against brothers Anton and James Peraire-Bueno, who were accused of fraud in the Ethereum network and stealing $25 million in cryptocurrency, as reported by Business Insider.
According to journalists present at the hearing, the jury failed to reach a unanimous decision. Their final motion indicated that during deliberations, half of those present “unexpectedly burst into tears.” Some informed the judge in notes about “sleepless nights.”
“We are unanimously convinced that we are making no progress,” the jurors stated.
The hearing was not extended, concluding the four-week proceedings. Prosecutors have not yet announced any intention to seek a retrial.
One juror addressed the prosecutor, noting that the group could not reach a consensus on how to apply the law in this case. He also cited “insufficient discussion of the facts.”
During the trial, the jurors repeatedly requested clarifications and definitions of key terms such as “unlawful,” “intentional,” “misleading,” and “false deception.”
“There is no specific law on blockchain fraud. However, whether by phone, online, or in Ethereum, you cannot lie and deceive people for personal gain,” stated Assistant Prosecutor Danielle Marie Kudla during closing arguments.
The Peraire-Bueno brothers were arrested in the US in May 2024. They were charged with conspiracy to commit wire fraud and money laundering.
According to the investigation, Anton and James, who studied mathematics and computer science “at one of the world’s most prestigious universities,” used their knowledge “to compromise blockchain integrity.”
They launched an attack on operators of MEV bots specializing in arbitrage. To execute this, they acquired 16 Ethereum validator accounts, investing 529.5 ETH (~$880,000).
To lure victims, the brothers used “bait transactions” — operations involving the purchase of certain illiquid tokens. The main process took about 12 seconds, but it was preceded by extensive preparation and testing.
This was the first time charges were brought under such a scheme. The brothers faced up to 20 years in prison.
The defense argued that the Peraire-Bueno brothers earned their funds legally: their software simply “outsmarted” the victims’ bots. According to the lawyer, the defendants’ actions are standard in the “highly competitive, bot-eat-bot world of Ethereum.”
The prosecution, on the other hand, claimed that the brothers’ fraudulent actions involved “introducing a series of invalid zeros, which nullified the transaction block they were supposed to add to the blockchain.” Such manipulations allowed them to track and interfere with the victims’ transactions.
However, neither side was able to definitively sway the jury. It is likely that this is not the end of the legal proceedings in this case.
In August, a US jury found Tornado Cash developer Roman Storm guilty of conspiracy to operate an unlicensed money transmission business.
