What Exactly Is ‘Sandwich Trading’?
Sandwich trading, or “sandwich attacks,” involves bots that front-run pending crypto transactions, nudging up the token’s price before selling it off at a profit — effectively profiting from another trader’s move. Critics call it manipulative; defenders call it efficient market behavior.
During cross-examination, Yakira sparred with defense attorney Daniel Marx over whether sandwich trading hurts “the victim in the middle.” Yakira rejected that framing outright.
“The middle trader executes their own transaction,” Yakira argued. “We don’t alter it, we don’t manipulate it. We just use what’s there.”
Marx pressed further: “Isn’t the profit you make at their expense?”
Yakira shot back, “I’m not okay with that phrasing. The middle trade does exactly what it’s designed to do. There’s no guarantee they’d have gotten a better result without us.”
The Perfect Exploit: Turning Bots Against Their Masters
Prosecutors allege the Peraire-Bueno brothers flipped the script. Acting as Ethereum validators, they used a bug in the MEV-Boost software — which typically hides transaction data until blocks are confirmed — to peek at trade details early. With that forbidden glimpse, they reconstructed pending transactions, baiting the sandwich bots into pre-set traps.
The bots, running multimillion-dollar buy orders for illiquid crypto tokens, drove prices up — just as the brothers intended. Using early access, the brothers bought those same tokens cheaply, then sold them back to the bots for stablecoins, leaving the bots unable to complete their back-end trades.
In the blink of an algorithm, the brothers allegedly walked away with $25 million, leaving Savannah and others holding digital air.
