Former Ethereum Adviser Hits U.S. Government With Massive $9.6 Billion Lawsuit

Steven Nerayoff, an early Ethereum network adviser, wants the U.S. government to pay him nearly $10 billion in damages for criminal extortion charges that were later dropped after four years.

Nerayoff vs. US Gov’t

In a legal complaint lodged on April 9, Steven Nerayoff’s legal team alleges that government agents fabricated federal charges against the Ethereum insider in 2019. Prominent civil liberties attorney Alan Dershowitz indicated he would serve as a consultant on constitutional issues for Nerayoff’s suit.

Nerayoff, known for publicly accusing Ethereum founders Vitalik Buterin and Joseph Lubin of fraud, announced the lawsuit in an X post, where he vehemently stated, “Today I have filed my Federal Tort Claims Act (FTCA) lawsuit suing the US government for personal damages related to false prosecution. It is time we took a stand against this unrestrained corruption for all the people wrongly accused & to ensure justice against those who have been a part of this.”

According to the complaint, as part of their “collective and concerted fishing expedition,” federal agents subpoenaed, surveilled, and even arrested Nerayoff despite knowing the charges against him were “factually and legally baseless.”

Nerayoff and his attorneys say he was the victim of an “unhinged and unlawful, four-year” setup by the Federal Bureau of Investigation (FBI).

Nerayoff was allegedly apprehended in 2019 by a dozen gun-wielding FBI agents for purportedly extorting 10,000 Ethereum (ETH) from a cryptocurrency firm. The years-long legal fight that ensued ultimately ended in May 2023 when the U.S. government voluntarily dismissed the suit.

“The federal government was willing to ‘eat a shit sandwich,” and ignore the federal agents and/or officers’ unconstitutional, unauthorized actions in order to maintain the public appearance that DOJ and SEC were engaged in legitimate, well-informed, sexy law enforcement actions in the crypto space,” Nerayoff’s lawyers assert.

As per the suit, federal agents’ actions have caused Nerayoff “significant damages and injuries.”

“As a direct and proximate result of the wrongful conduct of federal agents and/or officers, Mr. Nerayoff’s well-being, personal life, and career were irreparably harmed,” the lawyers explained.

The $9.6 billion in damages represent losses Nerayoff suffered due to the harm the case did to his reputation.

At the time of writing, ether was valued at $3,594.