Hackers have been charged for a new type of hack into the Ethereum blockchain in the United States

What’s new? US authorities have arrested brothers Anton and James Peraire-Bueno for the first attack of its kind on the Ethereum blockchain, during which they gained access to pending transactions and were able to steal over $25 million in cryptocurrency from users. It is noted that they prepared the exploit for several months and carried it out in just 12 seconds.

Press release from the US Department of Justice

What else is known? According to prosecutors, 24-year-old Anton and 28-year-old James studied math and computer science at an unnamed prestigious American university and used their skills to hack and manipulate cryptocurrency protocols. The innovative and technologically sophisticated hacking scheme they developed “calls the very integrity of the blockchain into question,” law enforcement officials claim.

The Peraire-Bueno brothers managed to manipulate the process and protocols by which transactions are verified and added to the Ethereum blockchain. They gained access to transactions awaiting validation and changed the destination point of the cryptocurrencies. Afterward, they took a series of actions to conceal the source of the criminal funds.

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Preparing the exploit took several months, during which the brothers studied the trading behavior of the victim traders whose cryptocurrency they eventually stole, and laid the groundwork for hiding the stolen proceeds, including by creating shell companies and using multiple addresses on foreign crypto exchanges.

According to the search history reviewed, they sought information on ways to hide involvement in exploits, crypto exchanges without strict KYC procedures, attorneys specializing in cryptocurrency cases, the extradition process to the US, and penalties under the articles they were eventually charged with.

“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 press release emphasizes.

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The brothers face a number of charges on counts related to conspiracy to commit fraud and money laundering. The maximum penalty for each could be 20 years in prison. The IRS Cyber Crimes Unit, the NYPD, and Border Patrol and Customs Enforcement participated in the investigation.