🌋 Two Brothers Arrested for Exploiting Ethereum Blockchain
posted 16 May 2024
Two brothers have been arrested for conducting an MEV exploit, illegally netting around $25 million in cryptocurrency.
According to law enforcement officials, Anton Peraire-Bueno and James Pepaire-Bueno exploited a vulnerability in the MEV-Boost program, a tool used by Ethereum validators to select transactions from the mempool for block formation.
MEV bots are a common feature in trading, where they analyze mempool transactions to identify potentially lucrative trades and suggest transactions that match specific criteria to validators on behalf of their operators.
The Pereira-Bueno brothers set up 16 validator nodes to monitor the behavior of MEV bots and then manipulated this behavior through bait transactions. This strategy tricked the bots into executing disadvantageous trades for their operators. For example, they exchanged illiquid cryptocurrencies for stablecoins and more liquid assets, leaving MEV bot operators holding worthless assets.
The proceeds from their scheme were laundered through various addresses, including purchases of DAI and USDC.
This incident has raised concerns about the overall security of the Ethereum blockchain.
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