Ethereum advisor and tech-entrepreneur Steven Nerayoff arrested over an alleged extortion case

Entrepreneur, attorney, and venture capitalist Steven Nerayoff was arrested today and will appear before the court in an alleged extortion case. Steven and Michael Hlady allegedly threatened to destroy a cryptocurrency startup if they were not paid millions of dollars in ETH. 

US attorney Donoghue said that as alleged, “Nerayoff and Hlady carried out an old-fashioned shakedown, to be paid off with 21st-century cryptocurrency.” FBI assistant director-in-charge Sweeney called this scam as an old-age extortion scheme with a modern-day twist.  

In November 2017, a Seatle based cryptocurrency company hired Nerayoff to conduct an ICO. Initially, Nerayoff was supposed to get 22.5% of all funds raised and 22.5% of the cryptocurrency tokens issued as both the parties agreed on this arrangement. 

But days before the ICO, Nerayoff demanded an extra 17,000 ETH worth $8.5 million at the time. He threatened to destroy the company if his new demand was not met. With few days left to the ICO, the company caved to the new demands, but that was not it. 

Later, Nerayoff and his friend Hlady, who he claimed had worked with national intelligence and was involved in taking down of a head of state. In March 2018, the duo threatened the company to pay them a loan of 10,000 ETH worth $4.5 million or else their company would have to suffer. The company once again gave in to their demands. And to no surprise, the loan was never repaid. 

Nerayoff and Hlady could face up to 20 years of prison time if convicted in the case. Let us know in comments, what do you think of this alleged case?