Steven Nerayoff, a technology entrepreneur affiliated with Ethereum, Casper Labs, tZero, and dozens of other initial coin offerings (ICOs) and cryptocurrencies, was arrested September 18 along with Michael Hlady on charges of extortion.
Arrest for extortion
The United States Attorney for the Eastern District of New York and the FBI New York have jointly announced the allegations.
Two men are accused of threatening to destroy a startup in Seattle, which issued cryptocurrency tokens as a reward for loyalty to help customers attract users and sell products.
In November 2017, the company planned an ICOICO
(Initial Coin Offerings) is an acronym, which means a primary currency offer. Details and agreed to conclude an agreement according to which 22.5% of all raised funds and 22.5% of issued cryptocurrency tokens will be paid to Nerayoff for supporting a successful ICO.
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However, a few days before the ICO, Nerayoff demanded an additional 17,000 ETH, worth almost $8.5 million for additional work. This would increase his total compensation to 30,000 ETH. He threatened to disrupt the ICO and destroy the company if his requirements were not met. The company agreed. Later, Nerayoff introduced the team mate Khlady, whom he called an “operations specialist” with impressive national intelligence experience.
In March 2018, two men threatened the company and demanded a “loan” of 10,000 ETH in the amount of $4.45 million to avoid the destruction of the company. The money was sent to Nerayoff and was not returned.
Nerayoff and Khladн first appeared in federal court on September 18th. Two men can be sentenced to imprisonment for up to 20 years.