Lawyer, self-proclaimed Ethereum co-creator and “architect of the ICO,” Steven Nerayoff, has been charged with extortion for allegedly, “…threaten(ing) to destroy a startup cryptocurrency company if…not paid millions of dollars in the cryptocurrency Ether (ETH).”
Nerayoff’s LinkedIn profile indicates he has been, “an advisor or investor in more than 25 leading projects including Ethereum, CasperLabs, tZERO, Lisk, and AION.”
According to a release from the US Attorney’s Office in the Eastern District of New York, Nerayoff and an alleged co-conspirator, Michael Hlady, were both arrested early on Wednesday, September 18th, and appeared before judges that afternoon.
The release states that Micheal Hlady is a resident of Rhode Island.
A news report by CBS Boston states that a Rhode Island man named Michael Hlady was sentenced in 2011 to two-and-a-half years in prison years after pleading guilty to defrauding nuns running a Catholic school out of $363 000 USD.
That individual, who appears to be the same age as the Michael Hlady charged Wednesday, admitted to, “…an elaborate (fraud) scheme…(that included the use of) phony documents and phone calls where he would impersonate (a ‘wealthy donor’ called Arthur) Remillard.”
The school was left ‘almost penniless’ in that case.
US Attorney Richard P. Donoghue says Neyaroff and Hlady, “…carried out an old-fashioned shakedown, to be paid off with 21st-century cryptocurrency.”
The scheme allegedly involved Hlady posing as Nerayoff’s “operations guy” using the pseudonym ‘Michael Peters.’
Hlady allegedly told executives at the victim company that he was a former member of the Irish Republican Army, the NSA (National Security Agency), the CIA (Central Intelligence Agency) and the FBI (Federal Bureau of Investigation).
According to the release regarding Neyaroff’s arrest:
“The victim company, headquartered in Seattle, Washington, is a startup mobile-based business that…