Bitcoin
BTC$70 181.59

-0.59%

Ethereum
ETH$3 549.53

-0.77%

Tether
USDT$1.000206

0.07%

Binance Coin
BNB$615.62

4.81%

Solana
SOL$185.71

0.24%

XRP
XRP$0.629847

1.42%

Prominent ICO Advisor Arrested


23 Sep 2019

#Ethereum

Prominent ICO Advisor Arrested On Allegations Of Extortion


Two men have been arrested in the United States on allegations of running a cryptocurrency extortion scheme. One of the arrested individuals, Steven Nerayoff, is the former advisor to the Ethereum project, among other projects in which he served in the same capacity. Arrested with Nerayoff is Michael Hlady who is described as the operations man in the extortion scheme the two were running.

The Department of Justice said that the two individuals were arrested on allegations of having threatened to destroy a cryptocurrency startup if they did not receive Ethereum tokens worth millions of dollars. Richard Donoghue, United States Attorney, said that Nerayoff and Hlady carried out an old fashioned shakedown and demanded to be paid off in cryptocurrency.

Nerayoff was a vital member of the team that constructed the Ethereum network. He was responsible for constructing the legal frameworks which guided Ethereum token offerings. Nerayoff touts himself as the architect of the ICO.

Startup targeted in the extortion scheme


It is alleged that Nerayoff and Hlady targeted a Seattle based cryptocurrency startup that makes use of the digital assets for customer loyalty rewards. The company has not been named, but it makes blockchain based products for firms that are looking to generate user traffic and give these users rewards for their participation.

The scheme is said to have been run through Maple Ventures, an arm of Alchemist LLC. Alchemist LLC is a blockchain consultancy firm which was founded and headed by Nerayoff. Nerayoff provided his services to the unnamed startup through Maple Ventures, and it is this company that later demanded excessive payment through Ethereum tokens.

Extortion scheme


Nerayoff and Hlady are accused of trying to extort the crypto startup twice since 2017. The startup entered into a contract with Nerayoff’s firm in July 2017 as it planned to execute an initial coin offering (ICO). According to the terms of the contract, Nerayoff’s firm was to receive 22.5% of the funds raised during the ICO and 22.5% of the startup’s issued tokens.

A few days before the ICO went live, Nerayoff is said to have demanded more money from the crypto startup. The statement from the Department of Justice states that Nerayoff demanded that his share be increased from the agreed 13,000 ETH to 17,000 ETH. At the time, this would have been equal to $8.75 million in fiat currency. Nerayoff threatened to destroy the startup if they did not comply with his request, and the startup paid the requested amount. After the funds were paid, no further services were received from Nerayoff and his firm.

The second extortion occurred in March 2018. Nerayoff demanded a 10,000 ETH loan from the crypto startup, the equivalent of $4.45 million at the time. Hlady is said to have followed up the demands from Nerayoff with text messages threatening to destroy the crypto firm’s community. The company paid the loan but it was never paid back.  

At some point, the accuser stayed at Nerayoff’s New York apartment after bad weather blocked them from traveling. During that night, Hlady and Nerayoff entered the claimant's bedroom demanding money and making threats.  

The two accused individuals appeared in court and Nerayoff was released on a $750,000 bail. Hlady was ordered to reappear in court next week. If the two men are found guilty of the allegations they are facing, they are looking at over 20 years in prison each.

Author: Ali Raza for Crypto-Rating.com

Related

Crypto may be ready for a new leg down
Crypto may be ready for a new leg down
Cryptocurrencies wait for a signal
Cryptocurrencies wait for a signal
What are dynamic NFTs?: Use cases and examples
What are dynamic NFTs?: Use cases and examples
Shanghai Upgrade Fires Up ETH and Altcoins
Shanghai Upgrade Fires Up ETH and Altcoins
Challenges of data accessibility in the NFT market
Challenges of data accessibility in the NFT market
Is the A.I. revolution about to pump Nvidia stocks?
Is the A.I. revolution about to pump Nvidia stocks?
Five tips for investing during a global recession
Five tips for investing during a global recession
What is NFT ticketing and how does it work?
What is NFT ticketing and how does it work?
The crypto market is cheaper than a trillion again
The crypto market is cheaper than a trillion again

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 76.8% 42 $70 181.59 -0.59% 9.12% $1 380 285 312 968 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 76% 50 $3 549.53 -0.77% 4.33% $426 194 485 316 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 91.6% 1 $1.000206 0.07% -0.01% $104 525 818 800 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 63.6% 80 $615.62 4.81% 8.81% $92 057 057 069 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 61.2% 88 $185.71 0.24% 7.54% $82 530 358 500 SOL 7 days price change
6 XRP (XRP) XRP XRP predictions 84% 28 $0.629847 1.42% 2.16% $34 568 671 339 XRP 7 days price change
7 USD Coin (USDC) USDC USD Coin predictions 92% 2 $1.000077 0% 0% $32 492 648 969 USDC 7 days price change
8 Dogecoin (DOGE) DOGE Dogecoin predictions 70% 66 $0.213858 -1.24% 37.38% $30 723 668 610 DOGE 7 days price change
9 Cardano (ADA) ADA Cardano predictions 67.6% 66 $0.652274 0.14% 5.07% $23 210 538 187 ADA 7 days price change
10 Avalanche (AVAX) AVAX Avalanche predictions 60.4% 87 $53.79 -0.95% -1.78% $20 299 633 012 AVAX 7 days price change
11 SHIBA INU (SHIB) SHIB SHIBA INU predictions 54.8% 94 $0.000031 -4.56% 14.80% $18 193 408 608 SHIB 7 days price change
12 Toncoin (TON) TON Toncoin predictions 60.4% 86 $4.91 -0.70% 14.73% $17 036 072 542 TON 7 days price change
13 Polkadot (DOT) DOT Polkadot predictions 73.6% 49 $9.56 -0.09% 5.57% $13 642 215 721 DOT 7 days price change
14 Bitcoin Cash (BCH) BCH Bitcoin Cash predictions 72.4% 57 $634.20 10.67% 56.80% $12 482 514 661 BCH 7 days price change
15 Chainlink (LINK) LINK Chainlink predictions 80% 42 $18.96 -3.16% 5.47% $11 130 742 548 LINK 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2024 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.