The U.S. Department of Justice has charged extortion to Steven Nerayoff, one of the first Ethereum developers and a former paid consultant to the tZero security token platform, iHodl Russia reports.

Nerayoff and his partner Michael Hlady are facing up to 20 years in prison. They are accused of creating a scheme that the eastern district of New York prosecutors called the "old-fashioned money-laundering" while the FBI calls it "a time-tested extortion scheme in a new manner."

The prosecutor's office of the Southern District of New York found out that in November 2017, Nerayoff publicly promoted an ICO start-up and was supposed to receive 22.5% of the collected funds and 22.5% of the total issue.

A few days before the start of the campaign, he allegedly demanded an additional 17,000 ethers, threatening to destroy the reputation of the project in case of refusal.

The founders allegedly agreed, and the total amount of the "ransom" reached 30,000 ethers. In March 2018, Nerayoff and Michael Hlady allegedly threatened the same project with complete destruction, demanded 10,000 ethers on credit, and never returned them.

Earlier iHodl reported that the notorious Craig Wright, a self-proclaimed Satoshi Nakamoto, asked the court for a new 30-day extension.

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Originally posted here:

US Arrests One of the First Ethereum Devs - ihodl.com