In a court hearing in Manhattan, a former employee testified that two brothers who studied at MIT prepared a strategy to take millions from cryptocurrency traders by exploiting a software flaw.
The witness, Travis Chen, previously worked at 18decimal, a trading firm linked to Anton and James Peraire-Bueno.
According to Chen, the brothers spent several months analyzing trading behavior and testing how to take advantage of a feature in Ethereum’s
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Chen gave his account as part of a deal with prosecutors that protects him from being charged, though he is required to return $2.4 million that he received from the scheme.
As explained in court, the plan involved setting up fake transactions to attract trading bots, known as “sandwich bots”. These bots are designed to profit by placing their trades around another person’s transaction.
During a December 2022 meeting, Chen recalled seeing notes that estimated the operation could reach large amounts, possibly over $6 million if all targets were hit.
Eventually, the strategy was carried out in April 2023 and reportedly brought in about $25 million in just seconds.
Flashbots, the group that manages MEV-Boost, fixed the weakness in their software within a day. A developer from Flashbots, Robert Miller, also testified.
He said someone later contacted him without giving their name and offered to share details about a similar approach, on the condition that he not refer to the original incident as an “exploit”. Miller agreed to that request.
Recently, one of the three men accused in the kidnapping of Aiden Pleterski, who calls himself the “Crypto King”, admitted guilt in court. How did the trial go? Read the full story.
