A federal judge in Manhattan declared a mistrial in the case against brothers Anton and James Peraire-Bueno, who faced charges tied to a $25 million scheme on the Ethereum blockchain. The jury could not reach a unanimous verdict after several days of deliberations. US District Judge Jessica G.L. Clarke ended the proceedings late Friday.
Prosecutors alleged the defendants manipulated Ethereum’s validator ecosystem through MEV-Boost to reorder transactions and extract funds in seconds. They framed the conduct as a “bait-and-switch” that deceived automated trading systems. The defense countered that the brothers used public code and competitive strategies that operate within the network’s rules.
Jurors reported fatigue and distress as they struggled with complex questions on intent and deception in decentralized finance. Their notes reflected confusion over legal thresholds and how to apply them to algorithmic trading behavior on Ethereum. Judge Clarke urged continued deliberations before concluding that the panel remained hopelessly split.
The dispute centered on whether code-driven tactics that reorder transactions amount to fraud under federal law. Prosecutors argued the brothers acted with a wrongful purpose, while the defense said knowledge of illegality did not exist and that the conduct fit within the Ethereum network and its competitive MEV practices.
The court instructed jurors that purposeful deception can satisfy criminal standards even without proof that the defendants knew their actions were unlawful.
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The mistrial leaves open key questions about how US law treats MEV strategies and validator-layer tactics on public blockchains. Authorities must decide whether to retry the case, negotiate a resolution, or dismiss the charges. Any next step will influence how regulators and courts approach code-based market behavior on networks like Ethereum.
Industry participants view the proceeding as an early test of whether long-standing fraud statutes fit decentralized systems. The case highlighted gaps between open-source, transparent transaction ordering and traditional notions of deception. Observers expect renewed debate on policy, guidance, and market design to reduce incentives for harmful MEV while preserving fair competition.
The US Department of Justice charged the brothers in 2024, alleging a rapid extraction of funds tied to an April 2023 incident on Ethereum. The government characterized it as a first-of-its-kind exploit of validator-side infrastructure. Defense attorneys maintained that their clients used available tools in a high-speed environment where miners, validators, and searchers compete over transaction order.
Should prosecutors pursue a retrial, the court may confront similar questions on intent, disclosure, and harm in blockchain markets. Any eventual ruling could shape how exchanges, validators, and protocol teams mitigate MEV risks and protect users across Ethereum and other networks.