Why is the DOJ involved in blockchain disputes? ETH is imaginary, if they want to pretend it's actual property that can be stolen, they need to start following a lot of laws related to banking and financials that no one involved with blockchains wants to follow. At best this is some sort of cybercrime of the unauthorized access sort and even that is dubious.
Again and again we’re seeing people with lots of book knowledge and zero “street smarts” you’d think basic hygiene would dictate that you don’t save your browser history when it includes queries about how to commit crimes. Maybe use a browser that doesn’t back everything up to the cloud…
I admit that I don't understand the full details of what they did (the article doesn't get too in-depth with it), but here's what the DOJ press release [0] says:
>Anton Peraire-Bueno and James Pepaire-Bueno manipulated and tampered with the process and protocols by which transactions are validated and added to the Ethereum blockchain. In doing so, they fraudulently gained access to pending private transactions and used that access to alter certain transactions and obtain their victims’ cryptocurrency. Once the defendants stole their victims’ cryptocurrency, they rejected requests to return the stolen cryptocurrency and took numerous steps to hide their ill-gotten gains.
>Anton Peraire-Bueno and James Pepaire-Bueno meticulously planned the Exploit over the course of several months. Among other things, they learned the trading behaviors of the victim traders whose cryptocurrency they ultimately stole. As they planned the Exploit, they also took numerous steps to conceal their identities and lay the groundwork to conceal the stolen proceeds, including by setting up shell companies and using multiple private cryptocurrency addresses and foreign cryptocurrency exchanges. After the Exploit, the defendants transferred the stolen cryptocurrency through a series of transactions designed to conceal the source and ownership of the stolen funds.
Factually, they appear to have found a software bug. The community at large expected some range of inputs to the software, but as part of a cheat these folks provided inputs outside the range accepted by the community, which federal prosecutors are using as a substitute for proving an actual false statement, which is the real element.[1] It's interesting because the inputs apparently weren't "false" and maybe they weren't the sort of thing capable of falsity. Instead, they violated a community expectation -- that maybe wasn't documented.
Putting consciousness of guilt and money laundering aside for a moment... the government just charged exploiting a software bug for profit as a wire fraud.
