Early Ethereum Advisor Arrested on Extortion Charges

Early Ethereum Advisor Arrested on Extortion Charges

After allegedly being involved in a multi-million dollar extension scheme regarding cryptocurrency, the early Ethereum advisor, Steven Nerayoff has been put under arrest.

In the past, the tech entrepreneur has advised on several projects such as the aforementioned Ethereum and tZero but earlier this week, Nerayoff was arrested on charges of extortion. These charges were jointly announced by the United States Attorney for the Eastern District of New York and the FBI’s New York Field office.

According to the post published by the Department of Justice, alongside Michael Hlady, Nerayoff threatened to destroy a Seattle based crypto startup if they were not paid millions of dollars in Ethereum (ETH). the mobile startup in question was planning to issue crypto tokens as loyalty rewards for customers to bring in users.

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The U.S. Attorney for the Eastern District of New York, Richard P. Donoghue said:

“As alleged, Nerayoff and Hlady carried out an old-fashioned shakedown, to be paid off with 21st century cryptocurrency.

When you peel back the layers of this case, an age-old extortion scheme is revealed with a modern-day twist. Imposing forceful demands on a company for personal gain is risky business, whether one's preference is to be paid off with cryptocurrency or cold hard cash.”

Nerayoff has initially started an agreement to assist the startup launch a successful Initial Coin Offering (ICO) in return for 22.5% of the proceeds. But just days before the launch of the ICO, the tech entrepreneur told heads of the startup that his compensation would need to be increased to $8.75 million worth of Ethereum or else he would sabotage the project.

If convicted, both Neyaroff and Hlady could see up to 20 years in prison.

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!

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