After 18 tense days in Manhattan federal court, the high-profile trial of United States v. Peraire-Bueno ended in a mistrial.
Judge Jessica GL Clarke declared the trial a mistrial late Friday, saying the jury was deadlocked over wire fraud and money laundering charges. The challenges in the case are somewhat similar to those between the Justice Department and Tornado Cash.
$25 million test to see if code can be a crime
The case centers on two MIT graduates, Benjamin and Noah Peraire-Bueno, who are accused of orchestrating an attack on Ethereum's Maximal Extractable Value (MEV) system .
Ethereum MEV is the core mechanism that determines the order of transactions in blocks. Prosecutors allege that the two parties carried out “sandwich” attacks, manipulating the order of transactions to siphon off about $25 million from other traders.
Matthew Russell Lee of Inner-City Press describes the case as one of the most technically complex in the cryptocurrency space to date, testing the line between algorithmic opportunity and criminal intent.
The defense argued that the brothers exploited public blockchain code, which they claimed was “within the rules of the system,” the report said. Prosecutors, however, portrayed the scheme as a digital heist cleverly disguised as encryption. The mistrial was declared after three days of jury deliberations.
Throughout the trial, jurors struggled to understand how to interpret mens rea, or criminal intent, in the context of decentralized finance (DeFi) .
Code vs. Intent — Legal Gray Area Exposed in Failed Trial
According to court recordings Chia by Lee, defense attorney Looby argued that “the government doesn’t want a portrayal of intent there,” emphasizing that the defendant believed they were acting within the technical framework of Ethereum rather than committing a conventional fraud.
Prosecutors countered that the defendants acted with “improper intent,” exploiting a system designed to be transparent to defraud and enrich themselves.
Judge Clarke noted that under current statutes, “there is no requirement that defendants know their actions are illegal.”
The unsuccessful trial now leaves both regulators and developers with a difficult, if not no, precedent. The Peraire-Bueno case could have set a benchmark for whether exploits based on code in decentralized networks can be prosecuted under ordinary fraud laws.
Instead, it ended in ambiguity. The Justice Department has yet to announce whether it will seek a new trial. DeFi advocates can see the outcome as a victory for open systems and innovation.
To some extent, this case mirrors the challenges seen with the Tornado Cash case. Because the case focused on decentralization, it sparked debate about regulating blockchains in relation to criminal abuse.
As it initially did, a US federal appeals court has dismissed sanctions imposed by the Treasury Department on Tornado Cash.
