Coin Center Responds to Prosecutors in MEV Bot Case with New Brief

The cryptocurrency advocacy group Coin Center has provided its insights on the ongoing criminal proceedings involving two siblings who supposedly took advantage of the Ethereum blockchain utilizing maximal extractable value (MEV) bots.

In a Monday amicus curiae document — a paper submitted by an entity not directly involved in the case — Coin Center contended against a principal theory proposed by the prosecution concerning Anton and James Peraire-Bueno. These individuals are reportedly accountable for a $25 million MEV exploitation in April 2023.

Coin Center asserts that the US government’s allegations of “honest validation” are baseless and should be dismissed by the judiciary.

“‘Honest validation’ within cryptocurrency communities is a mathematical verification rather than a legal or normative assessment, and the Defendants seem to have violated none of the explicit guidelines or regulations present within the Ethereum protocol in a manner warranting external interference or enforcement,” stated Coin Center, further adding: 

“The prosecution is urging the Court to impose a new and foreign code of ethics over and above those protocol rules, not only without valid rationale but in a fashion that would be harmful for the government to pursue through criminal prosecution.”

The amicus brief, submitted on the 14th day of the Peraire-Buenos’ criminal proceedings, arrived amid resistance from US prosecutors, who argued that Coin Center would prompt a jury to clear the two siblings based on policy instead of legal arguments.

Related: Balancer exploit rises to $116M in outflows as team proposes 20% bounty

Diverse perspectives on the $25 million case

At the heart of the case is the MEV bot exploitation, which transpires when a validator alters the sequence of transactions within a block to maximize profits. The outcome of the trial is expected to hold considerable ramifications for cryptocurrency traders and platforms.

According to courtroom reports by Inner City Press, attorneys for the US government declared on Wednesday that they intended to assert that “the defendants operated under false pretenses by presenting themselves as honest validator[s],” thus enabling them to execute the exploit.

“In the Ethereum ecosystem, ‘honest’ validation simply signifies adherence to the established consensus rules delineated in the protocol software,” explained the Coin Center brief. “[A]cceptance of the prosecution’s ‘honest validator’ fraud theory would be foreign to common industry practices and violate long-standing legal principles of damnum absque injuria—harm without legal injury—and fair notification.”

Defense counsel reportedly labeled the theory as a “ridiculous allegation,” arguing in their opening statements that the “victims in this case were sandwich bots.”