A U.S. judge dismissed a motion by two brothers to overturn $25 million in encryption fraud charges.

CoinVoice has recently learned that a judge in the U.S., Jessica Clarke, rejected the motion by MIT graduates Peraire-Bueno brothers to dismiss the $25 million Crypto Assets fraud charges.

The prosecution accused the two brothers of exploiting vulnerabilities in the Ethereum network in May 2024 to carry out arbitrage attacks by manipulating MEV bots.

Court documents show that the two devised a four-step plan of "bait-block-search-spread," using 16 Ethereum validation nodes and 529.5 ETH as bait, intercepting the trading profits of the MEV bot within 12 seconds. The judge found their actions met the elements of telecommunications fraud, despite the defendants arguing that "the system code allows such operations."

The case is expected to go to trial in October 2025, with the two brothers facing felony charges of telecom fraud, conspiracy to launder money, and other serious offenses. The prosecution has dropped one charge of conspiracy to receive stolen property, but the remaining charges will still proceed to trial.

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