Former Ethereum advisor files $9.6B lawsuit against Biden administration stemming from false charges and corruption of federal agents

Steven Nerayoff, former advisor to decentralized blockchain Ethereum, and his legal team have filed a Federal Tort Claims Act (FTCA) lawsuit against the U.S. government. They are asking for $9.6 billion in personal damages as a result of false charges brought against him as well as the alleged cover-up of federal agents’ failings in the case against him.

“It is time we took a stand against this unrestrained corruption, for all the people wrongly accused and to ensure justice against those who have been a part of this,” Nerayoff posted on X. He also thanked Fox Business‘ Eleanor Terrett for making his case public and his lawyer Michael Scotto.

Originally shared by Terrett, the lawsuit alleged that Nerayoff’s “well-being, personal life and career were irreparably harmed” as a “direct and proximate result of the wrongful conduct of federal agents” following the government’s now-dropped claims that he criminally extorted an anonymous crypto startup.

Nerayoff also claimed that President Joe Biden’s Securities and Exchange Commission (SEC) and Department of Justice (DOJ) conspired in a “collective and concerted fishing expedition” into his business dealings beginning in 2017. He argued that federal agents wrongfully raided his home, handcuffed him, threw him into the back of a van and warned that he would not see his children grow up if he failed to provide them with information on several key players within the crypto industry.

His lawyer also alleged that federal agents willfully “ignored how they were violating Nerayoff’s constitutional rights and destroying his life under color of law” to maintain the public appearance that the DOJ and SEC were engaged in legitimate crypto-related enforcement actions. Specifically, Scotto accused Federal Bureau of Investigation (FBI) Special Agent Jordan Anderson of knowingly withholding information and mischaracterizing government evidence to “fabricate the false narrative” that he used “coercive, extortionary threats of violence, physical and economic harm” in conducting cryptocurrency-related business dealings.

While winning lawsuits against the federal government is notoriously difficult, Scotto believes their case against the government is strong. Prominent lawyer Alan Dershowitz, who is a consultant on the case, said Nerayoff’s case is “unusual.” “I am strongly opposed to prosecutors targeting individuals,” the attorney said. “That’s why I agreed to serve as a constitutional consultant to Nerayoff.”

Nerayoff is an entrepreneur, attorney, inventor of multiple international patents and founder of the blockchain consulting firm Alchemist. He is also a blockchain pioneer, known for his early involvement in projects like Ethereum in 2015. He was arrested by the FBI alongside his Alchemist associate Michael Hlady in September 2019. Both were charged with extortion, with authorities arguing that they threatened to “destroy a cryptocurrency startup if they were not paid millions of dollars” in Ether, the native cryptocurrency of the platform Ethereum.

Nerayoff airs grave concern amid SEC scrutiny of Ethereum

A few weeks ago, Nerayoff expressed serious concerns over the investigation of Ethereum by the SEC, claiming that the prospects of Ethereum exchange-traded funds (ETFs) might be facing more rigorous examination.

In an X thread, he aired his deep disappointment with how Ethereum has evolved. He said: “If my invention was followed, we wouldn’t have issues today; Ethereum would still be the base of crypto.”

He also slammed the Ethereum project for straying from its original vision, attributing the SEC’s investigation and the emergence of the ETHGate movement to the founding team’s greed. He argued that this deviation has turned Ethereum into a “deceptive database” manipulated by a select few at the expense of the broader community. “Ethereum is built on deceit and lies, and they think you’re all dumb enough to not be the wiser. Well, I am, and I am saying to all of you, don’t allow this to happen a day more. The Ethereum house of deceit must fall once and for all,” he added.

Nerayoff also highlighted the rise of scam Initial Coin Offerings (ICOs) and the resulting erosion of trust as outcomes of current Ethereum leadership moving away from his initial concepts. He also emphasized the non-fungible token (NFT) craze which he described as “a handful of people creating tokens and rug pulling them.”

According to reports, this is not the first time that Nerayoff voiced concerns over Ethereum and its leadership. In September 2023, he suggested that the ecosystem received preferential treatment from regulators through an infiltration of regulatory bodies. In an audio of a nearly three-hour call with Vitalik Buterin shared back in November 2023, he warned the Ethereum co-founder, “I am fairly convinced that securities laws and these other laws have been tripped.” (Related: Domino effect: TerraUSD collapse sends Bitcoin, Ethereum crashing.)

Read more stories related to digital currencies at CryptoCult.news.

Watch the video below that talks about Nerayoff being targeted by the federal government.

This video is from the High Hopes channel on Brighteon.com.

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Sources include:

CryptoNews.com

CoinTelegraph.com

ReadWrite.com

Brighteon.com