Cryptocurrency advocacy group CoinCenter reviewed the ongoing criminal trial of two brothers who allegedly exploited the Ethereum blockchain using Maximum Extractable Value (MEV) bots.
In Monday’s amicus curiae brief, filed by an entity not party to the case, Coin Center disputed one of the prosecution’s key theories of the case regarding Anton and James Perere-Bueno. The two are believed to be responsible for a $25 million worth of MEV exploit that occurred in April 2023.
According to Coin Center, the U.S. government’s “good faith verification” claim is baseless and should be rejected by the courts.
“‘Good faith verification’ in the crypto community is a mathematical check rather than a legal or normative determination, and defendants do not appear to have violated any clear rules or controls found within the Ethereum protocol in a manner that would merit outside interference or enforcement,” CoinCenter said, adding:
“Prosecutors are asking courts to impose a novel and alien code of conduct on top of these protocol rules, in a manner that is not only unwarranted but would be harmful if carried out by the government through criminal prosecution.”
sauce: peter van valkenburgh
The court brief, filed on the 14th day of the Perer Buenos’ criminal trial, came amid objections from U.S. prosecutors who argued that Coin Center would use policy arguments rather than legal arguments to urge the jury to acquit the two brothers.
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Various theories about the $25 million case
At the heart of this incident is an MEV bot exploit that occurs when validators manipulate the order of transactions within a block to maximize revenue. The outcome of this lawsuit could have significant implications among crypto traders and platforms.
Lawyers for the U.S. government said Wednesday that they plan to argue that “defendants falsely pretended to be honest verifiers” and allowed the abuse, Inner City Press reported from the courtroom.
“‘Honest’ verification within the Ethereum ecosystem simply means following certain consensus rules articulated in the protocol software,” the Coin Center overview states. “The prosecution’s adoption of the ‘honest validator’ fraud theory is alien to widespread industry practice and violates the long-standing legal principles of harmless harm and fair notice.”
According to reports, the defense called this theory a “nonsense argument” and argued in opening arguments that “the victim here was a sandwich bot.”
The two are charged with wire fraud, money laundering and conspiracy to receive stolen property. If convicted, the judge could sentence the brothers to up to 20 years in prison on each count.
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