-
Steven
Nerayoff,
a
former
adviser
to
the
Ethereum
network,
is
seeking
$9.6
billion
in
damages
from
the
U.S.
government
stemming
from
a
2019
case
against
him
that
was
later
dropped. -
Lawyers
for
Nerayoff
allege
their
client
was
framed
by
the
FBI
and
federal
prosecutors
in
order
to
get
him
to
turn
over
evidence
on
high-profile
people
in
the
crypto
industry.
Steven
Nerayoff,
an
early
adviser
to
the
Ethereum
network,
has
filed
a
notice
of
his
intent
to
sue
the
U.S.
government
for
$9.6
billion
in
damages
connected
to
his
2019
arrest
on
criminal
extortion
charges,
which
his
lawyers
called
“fabricated”
and
“baseless.”
Nerayoff’s
Federal
Tort
Claims
Act
(FTCA)
form,
which
was
provided
to
CoinDesk
by
his
lawyers,
is
the
first
step
towards
filing
a
lawsuit
against
the
Department
of
Justice
(DOJ).
In
FTCA
cases,
the
agencies
involved
must
be
notified
of
the
claimant’s
intention
to
sue
at
least
six
months
before
a
lawsuit
is
formally
filed.
Well-known
civil
liberties
lawyer
Alan
Dershowitz
confirmed
Wednesday
that
he
will
serve
as
a
consultant
on
constitutional
issues
for
Nerayoff’s
case.
The
government’s
charges
against
Nerayoff
were
dropped
in
May
2023.
Two
months
earlier,
prosecutors
moved
to
end
the
case,
admitting
that
they
had
obtained
material
exculpatory
evidence
and
were
unable
to
prove
the
charges
in
the
indictment
beyond
a
reasonable
doubt.
Nerayoff’s
lawyers
had,
before
that,
filed
a
motion
to
dismiss
that
was
chock-full
of
explosive
claims
against
the
federal
investigators
and
prosecutors
involved
in
the
case.
Nerayoff
and
his
lawyers
say
that
he
was
the
victim
of
an
elaborate,
years-long
setup
by
the
Federal
Bureau
of
Investigation
(FBI)
with
the
ultimate
intention
of
getting
him
to
turn
over
evidence
on
important
figures
in
the
crypto
industry.
The
FBI
did
not
respond
to
CoinDesk’s
request
for
comment
by
the
time
of
publication.
On
the
morning
of
Sept.
17,
2019,
Nerayoff
claims
he
was
arrested
by
a
dozen
gun-wielding
FBI
agents
and
interrogated
for
“hours”
in
an
unmarked
van
parked
outside
his
home.
According
to
Nerayoff,
the
agents
told
him
he
would
“not
see
his
young
minor
children
grow
old”
unless
he
cooperated
by
giving
them
information.
The
government
denied
the
majority
of
Nerayoff’s
claims
in
a
filing
of
its
own,
including
the
assertion
that
Nerayoff’s
colleague
and
former
co-defendant
on
the
extortion
charges,
Michael
Hlady,
was
a
government
informant.
Nerayoff’s
lawyers
maintain
that
Hlady,
who
was
convicted
of
swindling
Catholic
nuns
out
of
nearly
$400,000
in
2010,
was
“insinuated
…
into
[his]
orbit”
by
the
FBI,
in
order
to
help
them
build
a
case
against
Nerayoff.
In
2021,
Hlady
pleaded
guilty
to
the
extortion
charges
Nerayoff
was
also
tied
up
in.
But
last
month,
the
government
moved
to
drop
the
charges
against
him
and
allow
him
to
withdraw
his
guilty
plea,
instead
having
him
plead
guilty
to
one
count
of
wire
fraud
in
an
unrelated
fraud
scheme
he
committed
while
out
on
bond.