By Vismaya V
3 min read
Two MIT-educated brothers allegedly planned for months to exploit a software vulnerability and steal $25 million from crypto traders in just 12 seconds, a former employee testified Friday in Manhattan federal court.
Travis Chen, a quantitative trader and former employee of Anton and James Peraire-Bueno’s firm 18decimal, testified that during a December 2022 meeting, the brothers allegedly outlined a plan to manipulate Ethereum’s MEV-Boost protocol in an operation they referred to as “Omakase.”
"It was an operation that profited at the expense of sandwich bots," Chen testified under a nonprosecution agreement that required him to forfeit $2.4 million, his cut from the alleged heist, according to a Law360 report.
Sandwich bots are automated trading programs that exploit price movements by inserting their own transactions before and after a pending trade, “sandwiching” it, to profit from the resulting price slippage. In this case, the operation targeted those bots, turning their usual strategy against them.
The brothers face wire fraud and money laundering conspiracy charges carrying up to 20 years each for the 12-second heist, and went on trial last Tuesday after rejecting a plea deal.
Prosecutors allege the brothers became validators on Ethereum’s blockchain and exploited a glitch that let them view transaction data early, then restructured blocks to benefit themselves at the expense of “sandwich traders.”
Chen showed jurors notes from a December 2022 meeting outlining the plan’s scale, which read, “Operation size is enormous … $6 million on the contract. Large end if you trap them all at once, and could be way higher.”
Chen testified that the brothers spent months analyzing trading patterns to design eight “bait” transactions intended to entice sandwich bots. When the bots engaged, the brothers allegedly exploited a vulnerability to drain their funds.
The plan appeared successful. By April 2, 2023, they had allegedly executed the scheme, netting about $25 million.
Prosecutors also allege the brothers Googled "how to wash crypto" and "top crypto lawyers" as part of their planning, though the defense has sought to exclude this search history, arguing the searches occurred during privileged attorney consultations.
Chen also testified how Flashbots, the MEV-Boost software creator, fixed the vulnerability within 24 hours of the exploit.
Flashbots developer Robert Miller testified on Friday that the alleged perpetrators later contacted him anonymously, asking him not to call it an “exploit” in exchange for sharing details of a similar strategy, a proposal he said he accepted, though defense attorneys did object earlier in a letter to the court, saying his potential testimony will be based on expertise rather than direct investigation.
The defense also filed a letter the next day seeking to bar Chen from testifying about his current views on the scheme, noting he “repeatedly told the government that he did not think the alleged exploit was illegal or even wrongful at the time it occurred,” and arguing that any post-indictment remorse is irrelevant to what the brothers knew or believed then.
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