Steven Nerayoff Lawsuits Will Reveal Facts Supporting Claims Against Key Ethereum Figures, Says Attorney

Last updated: November 23, 2023 03:24 EST
. 4 min read

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In a new chapter of the ETHGate saga, Steven Nerayoff’s attorney, Michael Scotto, said they have ample evidence to back up forthcoming lawsuits against the US Government and additional private actors, as well as whistleblower filings that they intend to release, some of which will implicate major players in Ethereum’s early days.

In an interview with Cryptonews.com, Scotto detailed how they plan to counter the “false narrative” surrounding his client with factual revelations in the lawsuits, which will be filed in New York State and Federal Courts.

Steven Nerayoff, an early Ethereum insider, spent years battling government accusations of extortion before finally getting charges dismissed earlier this year. He is now seeking legal recourse.

BATTLING SYSTEMIC CORRUPTION EVERYWHERE: @SenWarren, I advocate for strong US crypto regulations. PLEASE go after the bad actors in our space. But the DOJ, SEC, & FBI prosecuted me for 3 1/2 years for a crime THEY fabricated. Despite proving this, the sham prosecution continued… https://t.co/HlNE9Tp3dp pic.twitter.com/qQZxzo20ca

— Steven Nerayoff (@StevenNerayoff) November 22, 2023

Scotto asserted that Nerayoff harbors no ill will toward Ethereum itself, which he still wants to see prosper, portraying Nerayoff as pro-crypto and pro-Ethereum philosophically. Nerayoff takes issue with how the project took shape and has objections over particular actions by specific leaders, however, he said.

While the validity of Nerayoff’s claims is still unconfirmed, Scotto said the forthcoming lawsuits will likely include charges of malicious prosecution and breach of contract over hundreds of millions in unpaid deals and that the whistleblower fillings will relate specifically to ETHGate.

As was seen in the recording Nerayoff published last week, he provided key strategic guidance to Ethereum co-founder Vitalik Buterin in 2015 on tackling mounting structural, legal, and financial problems.

An X post on November 15 from Nerayoff also hinted at the possibility of fraud being in the mix of allegations that will be revealed in the lawsuits.

“The recording isn’t directly related to the fraud but will illuminate a lot of what was really happening & show my involvement. The fraud will be in the lawsuit,” he wrote in the post.

The recording isn’t directly related to the fraud but will illuminate a lot of what was really happening & show my involvement.

The fraud will be in the lawsuit.

48-Hour Countdown: Ethereum Insider’s Shocking Fraud Expose Looms – Crypto News Flash https://t.co/uvD6PjfcVJ

— Steven Nerayoff (@StevenNerayoff) November 16, 2023

Though recognizing the need for change, Buterin seemed reluctant to make necessary choices in the recording. A restructuring plan was also proposed but never fully implemented.

Steven Nerayoff Exonerated After Years Defending Against Charges

Scotto explained that his client was focused entirely on defending himself after the September 2019 arrest until finally getting the government to dismiss charges. According to Scotto, Nerayoff felt fighting for his life and reputation against wrongful allegations took priority over releasing the recordings of himself and Buterin earlier.

“It’s not an exaggeration to say [he was] fighting for his life, and frankly we were only able to go on the offensive this past February when we filed our motion to dismiss,” Scotto said. “The case was eventually dismissed on the government’s motion because our motion proved they knew he was innocent and charged him anyway, and they ignored that evidence and simply said ‘Oh yeah, we can’t prove his guilt.’”

Now exonerated, Steven Nerayoff is going on the offense against parties he believes took advantage of the situation. Scotto said Nerayoff sat in court for years until he could fully clear his name.

“The idea was to kind of coordinate those (the recordings and lawsuits)… And so that’s coming shortly,” Scotto told Cryptonews.com. “…The idea was we would put this out there because when those lawsuits became public, we didn’t want people to then question who Steve was and what happened.”

Steve was innocent and we had the evidence to show the case was fabricated and his alleged co-conspirator was a govt informant. @JohnEDeaton1 commented on the dismissal. https://t.co/Tg5ToWsooN look to the east soon.

— michael scotto (@mascotto89) November 17, 2023

Scotto said that the dismissal of charges against Nerayoff followed revelations that government officials knew he was innocent at least seven months prior to arresting him, and that his alleged co-conspirator was an FBI informant who conned Nerayoff out of hundreds of thousands of dollars.

Lawyer Hints at SEC Role in Ethereum Investigation

Scotto said the facts would illuminate “coincidences between certain events that were going on at the SEC and steps that were being taken” against Nerayoff. He said one aspect of the lawsuits would deal with “malicious prosecution.”

“That’s a big one,” he said. “And then a couple of breach of contract cases on some of these deals that people basically either took advantage of the situation or [were] a part of creating the situation in order to stiff Steve of literally hundreds of millions of dollars.”

Scotto said the full sequence of events will make clear that the malicious prosecution occurred.

Soooo..given the news about Consensys, JPM , law suits and probable links to the SEC…can we conclude that Ethereum IS a centralised, bankers shit coin ?… Answers on a post card to @GaryGensler and the @SECGov and it was projection onto #XRP all along #XRPArmy #XRPCommunity

— MADDOG (@PMADDOGMAC) March 5, 2022

Within the next few weeks, Nerayoff is planning to release the Ethereum whistleblower filings and file the malicious prosecution lawsuit, according to Scotto, who maintained they have ample evidence to back claims of hundreds of millions in damages from broken deals.

Buterin and Lubin Silent Amid Accusations

Ethereum leaders have so far been publicly silent amid the bold accusations of shady activities. Scottor said he finds this lack of denial telling given the nature of the allegations.

He added that Nerayoff’s frustrations also stem from parts of the crypto media declining to cover his exoneration and the questionable circumstances around it. He ultimately released the collection of five Buterin recordings directly on the blockchain—decentralizing it—to get the story out.

Ethereum Community Faces Moment of Reckoning

If true, these latest allegations may present a crisis moment for Ethereum as doubts multiply regarding its origins and Buterin’s leadership. With the platform aspiring to be a Web3 backbone, this controversy could deepen existing concerns over stagnant Ether prices and developer frustrations.

“It’s up to other people to decide, but I think people will be able to judge based on these objective facts and conclusions that they can draw based on those facts,” Scotto said.