- Steven Nerayoff may face 20 years in prison if convicted.
- He is accused of extorting money from ICO startup.
The US authorities arrested Steven Nerayoff, an early supporter of Ethereum project and an attorney and founder of blockchain consulting company Alchemist. U.S. law enforcement agency charges Nerayoff of extortion. The FBI also arrested an Alchemist associate Michael Hlady, who was allegedly involved in the scheme.
If convicted, Nerayoff and Hlady may spend the next 20 years in prison.
“As alleged, Nerayoff and Hlady carried out an old-fashioned shakedown, to be paid off with 21st century cryptocurrency. This Office and our partners at the FBI are committed to protecting businesses from extortion, whether the demands are for U.S. dollars or cryptocurrency,” United States Attorney Donoghue stated.
The authorities emphasised that the defendants exploited an age-old extortion scheme with a modern twist.
Thus, according to the U.S. Attorney’s Office of the Eastern District of New York, Nerayoff’s firm was hired to promote an initial coin offering (ICO) for a blockchain-based startup for 22.5% of the cryptocurrency tokens sold during the ICO and 22.5% of all the funds raised by the company. However, right before the ICO he demanded an additional 17 000 ETH otherwise he threatened to ruin the company’s reputation. The founders of the company conceded while the total amount of the fee reached 30 000 ETH.
Meanwhile, a spokesperson for Casper Labs confirmed to CoinDesk that Steven Nerayoff was no longer a member of its team.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.