Ethereum Adviser Seeks $100M from Law Firm for Mishandled Extortion Case Defense

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by Giorgi Kostiuk

2 years ago

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  1. Nerayoff's Allegations
  2. Arrest and Investigation
  3. Legal Battle


    4. Steven Nerayoff, an early adviser to the Ethereum network, is suing law firm Covington & Burling for $100 million, claiming it mishandled his defense in a 2019 extortion case.

    Nerayoff's Allegations

    Nerayoff alleged that Covington lawyer Alan Vinegrad advised him not to turn over videos of 'negotiations with the alleged victims' and emails and other messages to US prosecutors, which he claimed showed his dealings were 'entirely lawful.'

    Arrest and Investigation

    On September 18, 2019, Nerayoff and his associate at blockchain consulting firm Alchemist, Michael Hlady, were arrested and charged with extorting a cryptocurrency startup. Nerayoff said he gave prosecutors the videos and other evidence in June 2022, and the charges were dismissed less than a year later in May 2023.

    Legal Battle

    In the suit, Nerayoff claimed the whole case could have been 'staved off' had his Covington attorneys 'presented the clearly exculpatory evidence to the prosecutors in the fall of 2019.' A Covington spokesperson denied the allegations, stating the 'lawsuit lacks merit, and we will defend against it vigorously.' Nerayoff also alleged that Covington withdrew from representing him after he was indicted on January 10, 2020, and he then spent the next three years and over $1 million in legal fees.

    Nerayoff has filed several other lawsuits this year, including a $9.6 billion lawsuit against the US government and a $10 million defamation lawsuit against Tyler Fayard. His current attorney, Romeo Salta, is seeking an amount 'to be determined at trial but not less than' $100 million for Nerayoff's lost business opportunities in the crypto industry.

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