- Advisor to Seattle Based Digital Currency Startup Charged with $8.75 Million Extortion
- Nerayoff Faces 20 Years in Jail for Crypto Startup Exploitation if the Charges Stick
According to reports, a cryptocurrency entrepreneur has been charged with extortion. Steven Nerayoff is the accused. Nerayoff who serves as an advisor to the unnamed Seattle based cryptocurrency startup has been accused of threatening to wreck the company. The firm alleges that the crypto proponent made the threats in a bid to ensure that his demands are met. Nerayoff is believed to have demanded for a fee of $8 million for his efforts.
Nerayoff was brought in as an advisor. His duty was to help the company form partnerships and draw in investors. It is understood that Nerayoff was due to receive a handsome reward for his role in the firm. However, company has accused the entrepreneur of demanding for too much after he requested for $8 million.
Nerayoff Faces 20 Years in Jail for Crypto Startup Exploitation if the Charges Stick
The Seattle Times reported that Nerayoff, an early crypto entrepreneur and advocate, agreed to offer his services to the Seattle-based startup in 2017. Nerayoff had the duty of writing the firm’s whitepaper among other things. He was due to get 22.5% of the total sum of tokens issued by the startup and any amount raised during funding.
Considering the fact that the company realized $16 million via seed funding, Nerayoff was due to receive $3.7 million for his role in their ranks. However, he is accused of demanding nearly half of the seed funding money ($8.75 million). He reportedly threatened to “sabotage the crowdsale, and generate negative press for the firm. The crypto proponent also threatened to use his influence to ‘destroy’” the company. As of September 21, 2019, the startup has paid $3.78 million in Ether tokens to Nerayoff.
Nerayoff Demanded a $4.45 Million Loan During Last Year’s Crypto Crash
After this Nerayoff upped his demands. The crypto proponent demanded for a $4.45 million loan during the cryptocurrency market crash. Nerayoff failed to return the borrowed funds. He also demanded that the firm pay him 350 million tokens. He enlisted the help of Michael Hlady, his “operations guy”, to make further demands from the company. Hlady served in the Irish Republican Army, the NAS, CIA and FBI. Hlady has been allegedly threatened the family of the company’s chief operating officer.
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Nerayoff and Hlady have been arrested and if found guilty, could face 20 years in prison. Both men are out on bail as of press time. Nerayoff’s legal representation has refuted the charges, claiming that the firm owed their client money. They have accused the company of fabricate fake stories.
Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.