After 18 tense days in a Manhattan federal courtroom, the high-profile case United States v. Perer Bueno ended in a miscarriage of justice.
Judge Jessica G.L. Clark announced the verdict late Friday, saying the jury was deadlocked in being unable to reach a unanimous verdict on the wire fraud and money laundering charges. The challenges seen in this case are somewhat similar to what happened between the Department of Justice and Tornado Cash.
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$25 million trial tests whether code can be a crime
The case centered around Benjamin Perer Bueno and Noah Perer Bueno, two MIT-educated brothers who were accused of orchestrating an exploit of Ethereum’s Maximum Extractable Value (MEV) system.
Ethereum MEV is the core mechanism that determines how transactions are ordered within blocks. Prosecutors alleged the pair carried out a so-called “sandwich attack,” siphoning about $25 million from other traders by manipulating the order of trades.
Matthew Russell Lee of Inner City Press said the case is one of the most technically complex cryptographic cases ever, testing the line between algorithmic opportunism and criminal intent.
According to the report, the defense argued that the brothers were using public blockchain code and that their actions were “within the rules of the system.” But prosecutors portrayed the scheme as a calculated digital heist disguised as sophisticated coding. After three days of deliberations by the jury, a mistrial was declared.
Throughout the trial, jurors struggled to understand how to interpret menrea, or criminal intent, in the context of decentralized finance (DeFi).
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Code and Intent — Legal Gray Areas Exposed by Miscarriages of Justice
According to court records shared by Lee, defense attorney Luby argued that “the government didn’t want to put this statement of intent in there,” stressing that he believed the defendants were acting within the technical framework of Ethereum rather than traditional fraud.
Prosecutors countered that the defendants acted with “wrong objectives” by exploiting a system designed for transparency to deceive and enrich themselves.
Judge Clark noted that under current law, “there is no requirement that the defendant be aware that his or her conduct is unlawful.”
This miscarriage of justice has left both regulators and developers with difficult precedents, or lack thereof. The case of Peraire v. Bueno could be a landmark ruling on whether code-based exploits in decentralized networks can be prosecuted under traditional fraud laws.
Rather, it ends in ambiguity. The Justice Department has not yet announced whether it will seek a retrial. DeFi proponents could call this result a victory for open systems and innovation.
To some extent, this incident mirrors the challenges seen in the Tornado Cash incident. Because the case focused on decentralization, it sparked a debate about the regulation of blockchain in relation to criminal abuse.
As happened the first time, a U.S. federal appeals court reversed sanctions imposed by the Treasury Department against Tornado Cash.
