Travis Chen, a quantitative trader who worked for the brothers’ company, testified in Manhattan federal court about a December 2022 meeting where the brothers outlined an alleged scheme to exploit a software vulnerability in Ethereum’s MEV-Boost protocol.
Chen, a former employee of Anton and James Peraire-Bueno’s firm 18decimal, described the operation, code-named “Omakase,” which was designed to profit at the expense of sandwich bots — automated trading programs that capitalize on price movements by inserting their own transactions before and after a pending trade, effectively “sandwiching” it to generate profit from the resulting price slippage. In this case, the brothers reportedly planned to use the bots’ own tactics against them.
During the trial, Chen testified under a nonprosecution agreement that required him to forfeit $2.4 million — his share of the alleged heist. Notes from the December 2022 planning meeting revealed that the brothers anticipated making $6 million from the operation, with potential to earn “way higher” amounts if they could “trap them all at once.”
According to prosecutors, the MIT-educated brothers spent months analyzing trading patterns and designed eight “bait” transactions to attract sandwich bots. Once the bots engaged, they allegedly exploited a vulnerability allowing them to drain the bots’ funds by restructuring blocks to their advantage.
The scheme was reportedly executed by April 2, 2023, netting approximately $25 million in just 12 seconds. The brothers face wire fraud and money laundering conspiracy charges, each carrying up to 20 years in prison. They went on trial last Tuesday after rejecting a plea deal.
Further testimony revealed that the brothers, as validators on Ethereum’s blockchain, exploited a glitch that allowed early access to transaction data before block finalization. Prosecutors also allege the brothers searched online for phrases such as “how to wash crypto” and “top crypto lawyers” during their planning, though the defense has sought to exclude this evidence, arguing the searches took place during privileged communications with attorneys.
Flashbots developer Robert Miller also testified that the vulnerability was fixed within 24 hours of the exploit. He stated that the alleged perpetrators later contacted him anonymously, asking him not to refer to their activity as an “exploit” in exchange for details of a similar strategy. Miller said he accepted the proposal, though the defense had objected to his testimony earlier, claiming it would be based on his expertise rather than direct investigation.
The trial continues as the court examines the full scope of the brothers’ actions and intentions in this unprecedented crypto trading heist.
https://decrypt.co/344933/insider-testifies-mit-brothers-allegedly-planned-25m-crypto-heist