A U.S. federal court has declared a mistrial in the high-profile case involving brothers Anton and James Pepaire-Bueno, who were accused of orchestrating a sophisticated digital scheme that exploited vulnerabilities in the Ethereum (ETH) MEV-Boost system. The indictment, originally filed by the U.S. Department of Justice in May 2024, alleged that the pair illicitly obtained $25 million through a deceptive strategy that manipulated blockchain transactions.
The trial, which took place over four weeks in the Southern District of New York, ended without a conclusive verdict, as the jury failed to reach a unanimous decision. Despite intense deliberations spanning three days, jurors were unable to agree on whether the defendants’ actions constituted wire fraud and money laundering, as charged by federal prosecutors.
The case centered around a novel and complex manipulation of Ethereum’s Maximal Extractable Value (MEV) Boost protocol—a system designed to optimize transaction inclusion in blockchain blocks for higher profitability. Acting as block builders, the brothers allegedly crafted a “poisoned” block that deceived trading bots into prematurely revealing their strategies. This allowed the defendants to execute a precise “sandwich attack”—a tactic where they placed their trades before and after a target trade to capitalize on the price movement it triggered.
This method, according to prosecutors, enabled the Pepaire-Bueno brothers to extract $25 million in just 12 seconds. They argued that the act constituted fraud, likening it to a digital version of front-running—an illegal practice in traditional finance. Prosecutor Danielle Marie Kudla emphasized that the actions were intended to mislead and harm other market participants, asserting that such behavior should be penalized under federal law.
However, the defense pushed back, framing the events as an example of aggressive—yet lawful—participation in a highly competitive, algorithm-driven trading environment. Defense lawyers contended that the Ethereum ecosystem is inherently adversarial, with bots constantly vying for economic advantage. In this context, they argued, the brothers merely leveraged public and protocol-level mechanics to their benefit, without violating any clear legal boundaries.
Jurors, overwhelmed by the technical and ethical complexity of the case, reportedly experienced emotional distress during deliberations. Some broke down in tears and reported sleepless nights as they grappled with the unprecedented nature of the accusations. The situation was further complicated by logistical concerns, including one juror’s upcoming travel plans, prompting Judge Jessica Clarke to declare a mistrial rather than continue with an incomplete jury.
Though the mistrial means the Pepaire-Bueno brothers are not currently convicted, the case is far from over. The Justice Department retains the authority to retry the case, and the charges remain formally active. Prosecutors have not yet indicated whether they will pursue a second trial, but legal experts suggest the government may re-evaluate its strategy before proceeding.
This case marks a critical moment in the intersection of blockchain technology and U.S. criminal law. It underscores the challenges of translating traditional legal definitions of fraud into the context of decentralized finance (DeFi), where rules are often governed by code, not courts. The outcome may influence how future cases involving blockchain manipulation are prosecuted, especially as MEV strategies become more prevalent.
The MEV (Maximal Extractable Value) concept refers to the additional profit a block producer can earn by reordering, including, or excluding transactions in a blockchain block. While MEV has been acknowledged as a technical inevitability in permissionless systems like Ethereum, its exploitation remains controversial. Some argue that MEV extraction is akin to market-making or arbitrage, while others view it as predatory behavior that undermines fairness and transparency.
In this case, the alleged fraud stemmed not merely from extracting MEV, but from creating a tainted block to bait bots into self-sabotage—a tactic never before seen at this scale. Legal scholars are watching closely to see if courts will eventually distinguish between permissible MEV strategies and those that cross into criminal territory.
Moreover, the case raises broader concerns about the legal liability of technically sophisticated users who exploit protocol-level vulnerabilities. As blockchain systems continue to evolve, the line between clever engineering and criminal intent becomes increasingly blurred. Regulators and lawmakers may need to establish clearer guidelines for what constitutes fraud in decentralized ecosystems.
From a technical standpoint, the attack executed by the Pepaire-Bueno brothers illustrates the power and danger of block building in Ethereum’s post-Merge architecture, where roles like proposers and builders are separated. While this design aims to decentralize power and boost efficiency, it also introduces new attack surfaces. The case has sparked debate within the Ethereum developer community about whether MEV-Boost and similar technologies should be redesigned or more tightly regulated.
The mistrial also underscores the difficulty juries face when confronted with highly technical cases involving blockchain mechanics. As digital finance becomes more integrated into the mainstream economy, there’s a growing need for judges, jurors, and legal professionals to receive education on blockchain principles to ensure informed decisions.
In the meantime, the Pepaire-Bueno brothers remain free, though with legal uncertainty hanging over them. Whether they will face a retrial depends on the Justice Department’s next move. Regardless of the outcome, the case has already set a precedent in the legal treatment of blockchain-based financial strategies and will likely influence future regulatory and prosecutorial approaches in the crypto space.
As the crypto industry awaits further developments in the case, the broader implications for Ethereum, MEV practices, and decentralized finance will continue to unfold. The mistrial may have paused the courtroom drama—but the legal, technical, and ethical debates surrounding MEV exploitation are only just beginning.