Early Ethereum Figure Sues US Government In $9.6B Extortion Case Dismissal

Steven Nerayoff, a prominent figure in the blockchain space, is suing the US government for nearly $10 billion in damages.

What Happened: Nerayoff, known for his early involvement with Ethereum and his public criticism of co-founder Vitalik Buterin, claims he was falsely accused and mistreated by federal agents.

Nerayoff’s lawsuit stems from a 2019 extortion case brought against him by the US government. He alleges the charges were baseless and that the case dragged on for four years before being dismissed in May 2023.

The lawsuit, filed under the Federal Tort Claims Act, details Nerayoff’s claims of harassment and intimidation by federal agents. He alleges they fabricated evidence and employed manipulative tactics to secure a conviction.

Nerayoff’s legal team argues that the ordeal significantly damaged his reputation and businesses. The lawsuit highlights the financial strain of legal fees and the loss of income he suffered due to being ostracized within the cryptocurrency community.

“He incurred significant legal fees to defend himself while simultaneously losing income as a result of becoming a feared pariah in the crypto community,” the filing states.

Also Read: Solana Challenges Ethereum’s Lead In Blockchain Payments Race, Report Finds

According to reports, Nerayoff enlisted renowned lawyer Alan Dershowitz as a consultant for his case. Dershowitz reportedly views the situation as “unusual.”

Nerayoff is a multifaceted figure. He is a serial entrepreneur, lawyer, inventor with multiple patents, and the founder of blockchain consulting firm Alchemist. He’s also recognized as a blockchain pioneer for his early contributions to projects like Ethereum in 2015.

The 2019 arrest by the FBI, which targeted both Nerayoff and his associate Michael Hlady, alleged they threatened a cryptocurrency startup with financial ruin unless paid millions of dollars in Ethereum.

What’s Next: Nerayoff’s lawsuit underscores the complexities and potential pitfalls within the cryptocurrency landscape.

Benzinga’s upcoming Future of Digital Assets conference on Nov. 19 promises to be a valuable platform for navigating these uncertainties.

This event will convene industry leaders, legal experts, and investors to discuss legal frameworks, emerging challenges, and strategies for responsible innovation in the digital asset space.

Read Next: Senator Elizabeth Warren: Regulating Stablecoins ‘Could Amplify Risks’

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