In May of last year, two brothers in their 20s were arrested for what the Justice Department at the time called “attacking the Ethereum blockchain and stealing $25 million.” Attacking the blockchain does sound like a cool, sci-fi crime, but the brothers maintained that they were just aggressive traders, not criminals, and yesterday, their prosecution culminated in what sounds like a very stressful mistrial.
The prosecution’s case was that Anton Peraire-Bueno and James Pepaire-Bueno set a trap that amounted to fraud. Prosecutors said they preyed upon crypto trading bots that moved digital money around on behalf of, apparently, three entities tied to actual human beings—although only one, David Yakira, ever came forward as an alleged victim. The trading bots were targeted because they were performing what are known as “sandwich transactions,” and were allegedly lured into situations that caused them to glitch out and release valuable tokens in exchange for, well, shitcoins.
Then the brothers allegedly tried to launder their winnings.
Performing digital muggings (allegedly!) on bots that perform sandwich transactions required extreme sophistication, and the ability to spot an exploit that wasn’t expressly forbidden in the Wild West universe that is crypto land.
The nature of the scheme also seems like a bid for a Robin Hood-type vigilante reputation. Sandwich transactions are legal, but are perceived as parasitic arbitrage plays, or at the very least extremely irritating—essentially just gaming unsuspecting people’s transactions to set the price where the, if you will, sandwich artisan wants it in order to make a quick buck at the expense of a sucker with no recourse. In other words, it appears the brothers correctly predicted the rather nasty behavior of some bots, slipped in some sketchy code, and came away with $25 million.
So were these brothers grifters, or just aggressive traders with what their lawyer called a very good “trading strategy”?
According to Business Insider, the Pepaire-Bueno brothers faced a Manhattan jury specifically chosen to pry apart these fuzzy distinctions, with half of them holding masters degrees of one sort or another. “Almost all,” Business Insider noted, were either middle-aged or retirement-aged.
Welp, in the course of a three week trial, that ambiguity was apparently not resolved to the unanimous satisfaction of the jury, and things sound like they got intense for this unhappy group of 12 people.
According to Bloomberg’s account of the mistrial declaration, while an anonymous juror later explained that the facts of the case were not in dispute, at some point on Friday, the jury pleaded with the judge for help coming to a resolution. Some had lost “multiple nights” of sleep. Then later in the day, a note from the jury said that coming to a decision was placing them under an “emotional burden” and that half of the jurors had “spontaneously broken down in tears” while they were deliberating.
So U.S. District Judge Jessica Clarke went ahead and declared a mistrial Friday.
To be clear, a deadlocked jury doesn’t necessarily free the Peraire-Bueno brothers, but it is unwelcome news for prosecutors, who will naturally want to retry the brothers in the hopes of getting a conviction. But they do so with the burden of having already fought to a stalemate, which can’t be any better for morale than the fact that deliberating on the details of this highly technical case made a jury cry.
