According to a court filing on Tuesday, former Ethereum advisor Steven Nerayoff is suing the US government for $9.6 billion, alleging that the allegations against him were unfounded and that the government covered up the mistakes made by federal agents in the case against him. Eleanor Terrett, a journalist for Fox Business, first shared the lawsuit, which claims that Nerayoff’s “well-being, personal life, and career were irreparably harmed” as a “direct and proximate result of the wrongful conduct of federal agents” after the government withdrew its earlier accusations that he had illegally extorted an anonymous cryptocurrency startup.
The multibillion-dollar lawsuit that Steven Nerayoff filed against the US government
The former Ethereum advisor alleges that starting in or around 2017, the US Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) planned a “collective and concerted fishing expedition” into his financial operations.
Nerayoff is claiming in a sensationalized complaint that federal officials conducted an illegal raid on his home, arrested him, tossed him into the back of a van, and threatened to kill him if he didn’t give his kids information on several important figures in the cryptocurrency sector.
What are the Issue’s Specifics?
In September 2019, Nerayoff and Michael Hlady, his Alchemist partner, were taken into custody by the Federal Bureau of Investigation (FBI). Authorities said that Nerayoff and Hlady threatened to damage a cryptocurrency enterprise if millions of dollars were not paid in Ethereum. Both men were charged with extortion.
Nerayoff was a pioneer in the cryptocurrency space and has been involved in several scandals and court cases. The former advisor to Ethereum has long been critical of the platform, leveling grave accusations against its inventors, Joe Lubin and Vitaly Buterin, as well as the Ethereum Foundation.
Great thread @CoinpediaNews . The NFT isn’t about fraud it’s a recording of a rescue plan to save Ethereum Vitalik asked me to create in 2015. It’s a rare unedited historical view into what was really happening & crucial decisions made or not made which shaped much of crypto. https://t.co/4paTF5fseI
— Steven Nerayoff (@StevenNerayoff) November 14, 2023
Nerayoff made several claims about Ethereum’s growth and functioning, including dishonest initial coin offering procedures, wrongdoing on a personal level, and covert agreements with dishonest individuals. Nerayoff claimed, among other things, that regulators gave Ethereum special treatment; this was known in the community as “ETHGate.”
What The Lawsuit Indicates for Future Developments in Crypto
In a statement to X on Tuesday, Steven Nerayoff expressed optimism about the court filing despite the ordeal.
The lawsuit filed on Tuesday is Nerayoff’s most recent alarming allegation; before, he distributed unsubstantiated charges about Ethereum, claiming that the company had been treated favorably by US officials.
If verified, the legal action would severely damage American officials’ efforts to regulate the Bitcoin industry as a whole.
Also read: Blockchain Governance: A New Paradigm Shift for Financial Advisors
