Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.
with conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering. In essence, the brothers found a way to target bots that were frontrunning transactions in a process called maximal extractable value, or MEV, which refers to the amount of money that can be bled out of the block production process by ordering transactions.
As indicated by the DOJ’s filing, the brothers brought in approximately $25 million in at least eight separate transactions in what, according to the DOJ, was a highly orchestrated and premeditated plot. They set up shell companies and searched for ways to safely launder funds to avoid detection. The highly technical complaint spells out the process by which the exploit occurred, which the DOJ calls “the very first of its kind.
“It's not some kind of robin hood story as they didn't return the money to people MEVers extracted it from,” pseudonymous researcher In particular, and central to the DOJ’s case, is that the brothers found a way to sign false transactions in order to run the scheme. “This False Signature was designed to, and did, trick the Relay to prematurely release the content of the proposed block to the defendants, including private transaction information,” the document reads.
Others have also noted the technical sophistication of the DOJ’s argument, which seems to be less of an indictment of MEV or Ethereum itself than of an attempt to profit by unfairly gaining information. Still, others remain convinced that exploiting MEV bots designed to reorder transactions is fair game. “It's a little hard to sympathize with MEV bots and block builders getting f*cked over by block proposers, in the exact same way they are f*cking over end users,” the anonymous researcher said.
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