- Two brothers faced a mistrial after a jury deadlocked over charges of exploiting Ethereum blockchain to steal $25 million.
- The case centers on maximal extractable value (MEV), focusing on alleged manipulation of Ethereum’s validator layer.
- Prosecutors argued the defendants could be guilty even without knowing their actions were illegal, sparking dispute over legal intent (“mens rea”).
- The defense, supported by a crypto think tank, claims their actions were within Ethereum’s rules and warn against undermining blockchain validation incentives.
- The jury cited stress and exhaustion before the judge declared a mistrial after 11 failed notes from jurors.
Two brothers, Anton and James Peraire-Bueno, faced charges for allegedly stealing $25 million by manipulating transaction ordering on the Ethereum blockchain. The trial ended in mistrial after the jury could not reach a verdict on May 19, 2024. The case is the first criminal prosecution involving maximal extractable value (MEV), a method by which traders profit from how Ethereum transactions are ordered.
Unlike typical MEV strategies that operate on public transaction data, prosecutors said the brothers exploited Ethereum’s validator layer, responsible for ordering and confirming transactions. The Department of Justice described this as “the very first exploit of its kind” attacking “the very integrity of the Ethereum blockchain.”
The indictment alleges the brothers operated multiple Ethereum validators, accessed pending private transactions, and altered blocks to divert approximately $25 million in cryptocurrency to their accounts. The defendants are charged with wire fraud and money laundering.
Jury deliberations lasted three days before jurors sent multiple notes to Judge Clarke indicating they could not agree and were experiencing stress and exhaustion. After receiving 11 notes from the jury with no progress, Judge Clarke declared a mistrial.
Tension arose during the trial when prosecutors proposed instructing the jury that the brothers could be found guilty “even if they did not know” their actions were illegal, sparking disputes over mens rea—the required knowledge and intent to commit a crime. The defense insisted on proof that the defendants acted “knowingly, willfully, and with intent,” while the judge ruled partly in favor of the prosecution.
The defense, supported by the Washington-based crypto think tank Coin Center, argued the brothers’ conduct conformed to Ethereum’s internal protocols. The think tank warned that criminalizing such behavior could destabilize blockchain incentives and systems by replacing clear blockchain rules with subjective legal interpretations.
Typical MEV involves bots competing to profit from publicly visible transaction orders in Ethereum’s mempool, using strategies like “sandwich attacks” to capture small price changes. Prosecutors distinguish the brothers’ alleged exploit as extending to manipulating the block validation process itself, a key component of Ethereum’s blockchain operations.
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