Steven Nerayoff, an early consultant to the Ethereum network, has taken legal action against the United States government, claiming false charges and mistreatment by federal agents between 2019 and 2023.
Nerayoff, who is known for accusing Ethereum co-founder Vitalik Buterin of fraud, has filed a lawsuit under the Federal Tort Claims Act (FTCA) seeking $9.6 billion in damages for the extortion case brought against him in 2019.
The legal battle spanned four years, and the U.S. government ultimately dismissed the lawsuit in May 2023.
According to a new SF-95 filing by FOX Business journalist Eleanor Terrett, Nerayoff sued the federal government on the grounds that its agents were aware that the charges against him were baseless. He also claimed that some agents engaged in harassment and intimidation tactics, including fabricating evidence, in order to prosecute him for extortion.
Nerayoff’s legal team argues that the damage caused to his reputation and businesses is significant enough to warrant a lawsuit against the U.S. government. The filing states:
“Mr. Nerayoff suffered severe reputational harm and substantial damages to his businesses as a result of the baseless charges brought against him by the U.S. government.”
According to Terrett, Nerayoff enlisted the services of prominent lawyer Alan Dershowitz as a consultant on the case, who considers it to be “unusual.”
Nerayoff is a serial entrepreneur, attorney, inventor of multiple international patents, and the founder of blockchain consulting firm Alchemist. He is also a pioneer in the blockchain industry, having been involved in projects like Ethereum since 2015.
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Steven Nerayoff
Nerayoff and his Alchemist associate Michael Hlady were arrested by the Federal Bureau of Investigation (FBI) in September 2019. They were both charged with extortion, with authorities claiming that they threatened to “destroy a cryptocurrency startup if they were not paid millions of dollars” in Ether (ETH).
Nerayoff has been embroiled in various controversies and legal battles throughout his involvement in the cryptocurrency scene. He has repeatedly criticized Ethereum in the past, making serious allegations against founders Buterin and Lubin, as well as the Ethereum Foundation.
Nerayoff’s claims include fraudulent initial coin offerings, personal misconduct, and collusion with corrupt officials. One of his allegations is that Ethereum received favorable treatment from regulators, which has been referred to as “ETHGate” within the community.