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Cryptocurrency

$12M Cryptocurrency Extortion reported against Ethereum “ICO architect”

The news headlines are yet again stormed by news of cryptocurrency extortion, and this time the convicts are high profile personalities, including a former advisor to blockchain projects like Ethereum.

Steven Nerayoff, the former Ethereum advisor and his partner, Michael Hlady, supposedly threatened a not-so-popular Seattle based cryptocurrency company for not paying them millions of dollars’ worth of Ethereum. The company uses cryptocurrency to reward customer loyalty.

In July 2017, the Seattle based cryptocurrency exchange planned an ICO (Initial Coin Offering) and signed a legal contract with Maple Ventures, which is a blockchain consultancy founded by Nerayoff. As per the agreement, Nerayoff was supposed to deliver the ICO against 22.5% of the total funds raised and 22.5% of the tokens issued. However, just a couple of days before the ICO was due to commence, he bent down and demanded more from the firm.

According to reports, Nerayoff asked to increase the price of his shares by 17,000 ETH against the agreed amount of 13,000 ETH. By doing this, he thought he could extort $8.75 million worth of Ethereum. However, the firm managed to pay off Nerayoff as per his demands, but Nerayoff never showed up after receiving the amounts. Nor did his company paid any services to the startup company after that.

However, this is not the end of the incident. Maple Ventures continued to dupe the startup company, now by introducing one of his associates named Michael Hlady. Nerayoff introduced him as the “operations guy” as per the reports. Hlady brainwashed the officials of the startup company and claimed to have been long associated with many government agencies like CIA and NSA.

In March 2018, Nerayoff had again demanded a loan of 10,000 ETH from the company by continuously threatening them to destroy their community, following which the company was compelled to grant the credit. That was when the accused Nerayoff and Hlady showed off their dark sides. As per the reports, the claimant had to stay at Nerayoff’s home due to adverse weather conditions outside. Nerayoff and Hlady did not let go of this opportunity to threaten the claimant alone and demand more money. They entered the claimant’s room and threatened for money.

After all this treachery and threatening, the startup company lodged a report against the convicts, following which both appeared at the court yesterday. While Nerayoff was granted bail against $750,000, Hlady has been ordered to appear at the court again next week.

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Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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