Steven Nerayoff, former adviser to the Ethereum Foundation, has filed a $100 million lawsuit against law firm Covington & Burling, alleging they mishandled his defense in a 2019 crypto extortion case brought by the United States government. He claims this has resulted in significant financial losses and harm to his reputation, hence the legal action.
Nerayoff Crypto Extortion Case
In September 2019, the U.S. Attorney’s Office announced the arrest of Nerayoff and his associate Michael Hlady. It was alleged that the duo who were hired to assist a Seattle-based company with its initial coin offering (ICO), demanded millions of dollars and company tokens, without providing “additional services.” The charges were later dismissed in May 2023.
Even though the case has been dismissed, unsatisfied Nerayoff claims that Covington lawyer Alan Vinegrad advised him not to share justifying evidence, including videos and emails, with prosecutors. The ex-adviser argued that if these were presented, they would have proven that his dealings were “entirely lawful” and the case would have ended earlier.
Nerayoff claims that he spent over $1 million in legal fees over the next three years, after Covington & Burling withdrew from representing him following his indictment in January 2020. The accused law firm denied the allegations, calling the lawsuit “meritless” and stating it will vigorously defend against it.
Nerayoff’s Attorney Seeks $100M
Nerayoff’s current attorney, Romeo Salta, is seeking significant compensation for damages due to the alleged mishandling of his case by Covington & Burling. The law firm claimed that the indictment resulted in significant harm to their client’s business and reputation. It stated that he was unable to engage in business and lost other contracts in the crypto industry.
As such, Salta is seeking an amount “to be determined at trial but not less than” $100 million in damages. What this means is that the amount will be determined based on the evidence presented during the trial. Nerayoff’s legal team seems certain that the harm caused by Covington & Burling’s alleged negligence warrants significant compensation.
Nerayoff appears to be on a suing spree this year. In April, he filed a $9.6 billion lawsuit against the government. Furthermore, on July 22, Nerayoff filed a $10 million defamation lawsuit against Tyler Fayard, a social media personality known as “Boring Sleuth”
