The FBI arrested Steven Nerayoff, a US lawyer known for his work on advising ICOs (allegedly including the first ICO issued by Toronto’s Ethereum and Ethereum’s second ICO, The DAO), and charged him with extortion.
According to the complaint, Nerayoff was retained by the Seattle company to assist it to launch an ICO for a commission of 22.5% of all funds raised and 22.5% of all of the coins issued pursuant to the ICO. Just before the ICO was to launch, Nerayoff allegedly told his client it would have to pay him almost double the commission (equal to US$8.75 million back then) or he would destroy the company and sabotage the ICO.
The client allegedly paid the additional funds. Nerayoff allegedly did not perform additional legal services or other services for the increased commission.
Nerayoff is alleged to have introduced a guy named Michael Hlady to the Seattle company executives.
Hlady alleged that he was a member of the US Secret Service and that he had taken down a head of state. Subsequently, they both allegedly threatened the Seattle company with its destruction unless they paid them more money.
Part of the alleged extortion involved a course of conduct whereby Nerayoff and Hlady allegedly undertook searches to find out the name and location of the children of one of the startup’s founders, who was a woman, and looked up her previous employment history and let her know that they had that information, presumably to intimidate her.
Nerayoff and Hlady then asked for large sums of money.
Allegedly, the co-founder let Nerayoff and Hlady stay at her home on one occasion and on that occasion, Hlady allegedly woke the woman up from sleep one night and told her that if the startup did not give him $10 million, he would destroy her and harm her company.
Nerayoff runs a Blockchain company called Alchemist which allegedly advises the Toronto-based ICO called AION.
The bio of Nerayoff says he created the concept of ICOs, and says that he co-owns CasperLabs, a proof of stake startup, through a parent company.
Nerayoff has other Canadian connections besides Ethereum and AION – he says he is or was the chairman of a TSXV listed company called Global Blockchain Technologies Corp., a reporting issuer in British Columbia. On SEDI, he is listed as its current director.
In its pubic investor disclosure, it promised investors that their investment would be used to make Global Blockchain Technologies Corp. become the SWIFT of Blockchain.
It has now changed it named and services online gambling companies from Vancouver.
It is not registered by the provincial regulator, the Gaming Policy and Enforcement Branch, to provide services to any online gambling company.
Here Global Blockchain Technologies is promoted as the “world’s first publicly traded stock that invests in top-tier Blockchain and digital currency innovations.”
Nerayoff says he is an advisor of the ICO of Toronto-based Polymath; and online, the latter confirms he is their advisor. In its promotional material to investors, Polymath represented that Nerayoff is the co-founder of Ethereum.
Recently, Polymath and Nerayoff joined forces on an Alchemist accelerator to advise Blockchain startups, and Nerayoff is listed as an advisor with many other Toronto-based Blockchain companies, many of whom appeared with him at a Toronto ICO Conference held in 2018.