Brothers arrested in alleged $25M crypto fraud scheme: DOJ

There is regularity clarity around Bitcoin, while uncertainty around the rest of crypto: Natalie Brunell

Coin Stories podcast host Natalie Brunell reacts to Sam Bankman-Frieds 25-year prison sentence on The Claman Countdown.

Federal authorities have arrested a pair of brothers for allegedly carrying out an elaborate plot to steal millions of dollars' worth of cryptocurrency in what officials say is a first-of-its-kind case.

The U.S. Department of Justice (DOJ) on Wednesday charged James Pepaire-Bueno, 28, of New York, and his younger brother, Anton Peraire-Bueno, 24, of Boston, with conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering, accusing them of exploiting the etherum blockchain to steal $25 million from unsuspecting traders.

A pair of brothers from New York and Boston were arrested Wednesday for allegedly stealing $25 million worth of ethereum cryptocurrency. (iStock / iStock)

The unsealed indictment said the brothers studied math and computer science at "one of the most prestigious universities in the country," and leveraged the skills they developed from their educations to fraudulently gain access to pending transactions. The pair is accused of then altering those transactions, funneling the crypto to themselves and utilizing several methods to cover their tracks.

NYC POLICE SEARCH FOR SUSPECTS IN CASH-FOR-CRYPTO DEAL GONE BAD

The Pepaire-Buenos planned the scheme for months, and the heist only took around 12 seconds for them to carry out, authorities said. After the stolen crypto was in their possession, the indictment alleges, the brothers refused numerous requests to return the assets.

Federal authorities charged a pair of brothers from New York and Boston for allegedly exploiting the ethereum blockchain to steal from victim traders. (iStock / iStock)

U.S. Attorney Damian Williams for the Southern District of New York said the suspects "allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe, and noted that "this alleged scheme was novel and has never before been charged."

FBI WARNS OF TOLL SCAMS TARGETING DRIVERS THROUGH TEXT MESSAGES

Williams added, "But as the indictment makes clear, 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 brothers were slated for separate court appearances Wednesday afternoon in their respective cities, before U.S. Magistrate Judge Paul G. Levenson for the District of Massachusetts and U.S. Magistrate Judge Valerie Figueredo for the Southern District of New York.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

If convicted, they each face up to 20 years in federal prison for each count.