Banananomics: Spotlight On Iran's Stunning Nuclear Program

Spotlight On Iran's Stunning Nuclear Program

International Atomic Energy Authority chief Rafael Grossi said Tuesday he was apprehensive about recent comments from Iranian officials threatening to develop nuclear weapons.

Inputs that matter: Speaking with the UK's Guardian newspaper, Grossi said, "Loose talk about nuclear weapons is concerning for me. 

• We are moving closer to a situation with a huge question mark about what they are doing and why they are doing it."

• He added that the status of the agreement with Iran on inspecting its civil nuclear program is "in a very tight spot."

The opportunity: Grossi explained that is a point where he would "draw the line" with Iran, saying, "It would be a very critical juncture because the international community would have to grapple with the reality that we don't know what Iran may or may not have and the countries will draw their conclusions."

• Chairman of the Strategic Council on Foreign Relations and former foreign minister (1997-2005) Kamal Kharrazi stated in Dec. 2022 that Iran "can make" a nuclear weapon but "does not intend to."

• Tehran has not ruled out the possibility of increasing the level of enrichment to 90%, the purity necessary to build atomic weapons.

• Ali Akbar Salehi, a two-time former nuclear chief (2009-10, 2013-21) and ex-chief diplomat (2011-13), said in a TV interview on Feb. 11 that Iran has "crossed all the thresholds of nuclear science and technology."

Zoom in: On May 8, Iran's Kamal Kharrazi, an adviser to Supreme Leader Ayatollah Ali Khamenei, was reported as saying by Iran's Student News Network, "We have no decision to build a nuclear bomb, but should Iran's existence be threatened, there will be no choice but to change our military doctrine."

• Tehran has always insisted its nuclear program was strictly for peaceful purposes, a claim Israel and much of the Western world dismiss.

• The Guardian also reported that people close to Khamenei said he called for the UN weapons inspectors to be thrown out of Iran.

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Emerging Arrests For Two MIT Students That Fooled ETH Blockchain

Two MIT students allegedly stole $25M by exploiting an Ether (ETH) blockchain phenomenon, claims the U.S. Department of Justice (DOJ).

Inputs that matter: In a DOJ press release, U.S. Attorney Damian Williams said the scheme was so sophisticated that it "calls the very integrity of the blockchain into question."

• "The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe," Williams said.

• Anton, 24, and James Peraire-Bueno, 28, were arrested Tuesday and charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. The DOJ said each brother faces "a maximum penalty of 20 years in prison for each count."

The opportunity: The indictment explains in detail how the scheme allegedly worked by exploiting the Ethereum blockchain moments after a transaction was conducted but before the transaction was added to the blockchain.

• The DOJ explained that these pending transactions must be structured into a proposed block and then validated by a validator before they can be added to the blockchain, which acts as a decentralized ledger keeping track of crypto holdings. 

• The brothers seemed to tamper with this process by "establishing a series of Ethereum validators" through shell companies and foreign exchanges that concealed their identities and masked their efforts to manipulate the blocks and seize Ethereum.

• To do this, they allegedly deployed "bait transactions" designed to catch the attention of specialized bots often used to help buyers and sellers find lucrative prospects in the Ethereum network. 

• When bots snatched up the bait, their validators seemingly exploited a vulnerability in the process commonly used to structure blocks to alter the transaction by reordering the block to their advantage before adding it to the blockchain.

• When victims detected the theft, they tried to request the funds be returned, but the DOJ alleged that the brothers rejected those requests and hid the money instead.

Zoom in: The indictment said the brothers, who studied at MIT, launched the alleged scheme in December 2022 after months of planning. 

• The alleged 12-second attack is related to the controversial practice of MEV, or maximal extractable value.

• According to Wednesday's indictment, the Pepaire-Bueno brothers exploited MEV-boost, an MEV software used by most validators that run the Ethereum blockchain.

• MEV-boost lets "block builders" assemble those mempool transactions into official blocks. MEV bots called "searchers" scour the mempool for profitable trading opportunities. They will sometimes bribe builders to insert or reorder transactions in a manner that would net them an extra profit. 

• According to Coinbase, "These MEV strategies can sometimes eat into the profits of end users."

• Validators, the operators that ultimately add blocks to the Ethereum blockchain, take the pre-built blocks from MEV-boost and then write them to the chain, where they're cemented permanently.

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