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“Some cried. Many didn’t sleep.”
— Note from the jury to the judge United States v. Peraire-Bueno
No honor among robots?
Throwing a pitch in the dirt – even deliberately – is not a crime.
Nor is it a matter of choosing to throw a pitch above or below 94.5 miles per hour, as prosecutors in the Eastern District of New York have also accused Emmanuel Clase and Luis Ortiz of doing.
Instead, both Cleveland Guardians are accused of crimes that occurred off the field: wire fraud, money laundering and corruption.
This shouldn’t be difficult to prove.
The evidence includes text messages that the defendant sent to the co-conspirators to let them know that their next argument would be in the mud — and, yes, the texts were sent. during games.
To convict, prosecutors must simply demonstrate that the defendants and their co-conspirators gambled on these lands.
Any jury will understand that this is fraud: betting on an event that you know is rigged defrauds the person on the other side of the bet.
It is therefore enough to show the jurors two things: that the event was rigged and that the bets were placed.
In contrast, the jury is weighing the same charges – wire fraud and money laundering – in the Ethereum mining case. United States v. Peraire-Bueno faces a much more difficult task.
Unlike the MLB affair, what happened was not disputed: the Peraire-Bueno brothers made $25 million by tricking Ethereum sandwich bots into sandwiching themselves.
But why would this amount to wire fraud or money laundering?
Prosecutors said the brothers “stole” the money – but theft was not among the crimes they were accused of.
Like MLB pitchers, the brothers have been accused of actions (wire fraud and money laundering) that can only happen off the field and off the chain, respectively.
In the pitch-fixing case, what happened off the field was the betting.
In the case of crypto, what happened off-chain was simply the shifting of profits — in part, the brothers said, to pay taxes on their hard-earned capital gains.
For this to be a crime, prosecutors had to demonstrate that someone, somewhere, had been defrauded by the Peraire-Bueno brothers’ exploit.
This is what the jury had to decide: no What it happened, but WHOif applicable, was defrauded.
After long deliberations, the jury finally decided not to reach a decision: on Friday, United States v. Peraire-Bueno resulted in a mistrial.
Based on the trial transcript, I would say they made the right decision.
If the analogies do not match, you must acknowledge
Prosecutors argued that the operators of the MEV robots who lost money to the Peraire-Bueno brothers’ MEV robots were victims of fraud.
The brothers, they said, “engaged in false pretenses by presenting themselves as honest validators,” which fraudulently tricked MEV sandwich bots into trading with them.
In this narrative, the robots are like unsuspecting sports bettors betting that Emmanuel Clase would throw a strike against people who knew for sure that he would throw a ball.
Nobody thinks it’s fair.
The defense, however, countered that “presenting yourself as an honest Ethereum validator is an absurd allegation.”
Validators are just code, they thought, and it is impossible for code to “present itself” as honest or dishonest, or anything at all.
“When did this pose take place?” » asked the defense, adding that everything happened in code and the code was there for everyone to read.
This is in fact what the jury had to determine: can the code be dishonest?
Unfortunately, the Ethereum code in question is incredibly complex.
Peter Van Valkenburgh seems to speak for the few people who understand Ethereum code. And the law when he concludes that the Peraire-Bueno brothers “are taking maximum advantage of Ethereum’s consensus rules to the limit.”
Playing by the rules is never a crime – but in the case of Ethereum, what jury would understand them?
The defense repeatedly attempted to make Valkenburgh’s reasoning more accessible by referring to the much simpler world of sports:
“It’s not Charlie Brown football.”
“In football you kneel and you get penalized. »
“In NFL football, you decide to take a delay of game penalty.”
“It’s crypto, not college basketball.”
“It’s like stealing a base in baseball.”
I doubt all this gave the jury a better understanding of the Ethereum consensus rules.
But the prosecution responded with its own, less flattering analogy, comparing the brothers’ feat to “walking into a casino with a device that lets you game the system.”
It might have been helpful for either party to explain how this system worked, but neither party did so.
The prosecution also added the term “shitcoin” to the legal lexicon, perhaps to make the whole operation seem even more disreputable than a casino.
During cross-examination, the defense relied on OJ Simpson and The Sopranos Season 1, with no obvious goal.
As might be expected, the cumulative effect of all this for the jury was confusion.
“We are stressed,” the jury wrote to the judge at the end of its deliberations. “Yesterday, some cried. Many did not sleep.”
Judge Clarke, having endured the same parade of analogies, was sympathetic to their plight: “This is their eleventh mark,” she told the lawyers. “No progress. I will declare a mistrial.”
It was the only decent thing to do.
Afterward, one exhausted juror told the Inner City Press that the case “was just too complicated.”
Of course it was.
Ethereum’s rules are infinitely more complex than those of baseball, and jurors were not given enough information to understand them.
Can an MEV robot really fool another?
Can what is happening on the playing fields of Ethereum warrant conviction for real crimes?
It will take more than sports analogies to decide.
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