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    Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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The DOJ’s Puzzling Case Against Former Ethereum Advisor Steven Nerayoff

In a move that has left the cryptocurrency community buzzing, famous crypto influencer Mr. Huber took to Twitter to express his disbelief over the recent legal proceedings against Steven Nerayoff, a former Ethereum advisor. “This stinks to high heaven,” Huber tweeted, addressing the U.S. Department of Justice’s (DOJ) seemingly paradoxical stance in the case.

A Brief Background:

On January 10, 2020, Nerayoff and Hlady were charged with Hobbs Act Extortion Conspiracy, among other allegations, for extorting money and Ethereum (ETH) from a Seattle-based cryptocurrency business called Company 1. These charges covered their dealings with the company, leading up to its ICO in November 2017, and a 10,000 ETH loan from Company 1 in March 2018.

Michael Hlady pled guilty and openly confessed his agreement with Nerayoff to extort Company 1. This act usually would seal the fate of a co-defendant, especially when the plea involves admitting to conspiracy.

But the DOJ made an extraordinary move. On February 13, 2023, the department filed a motion that aimed to dismiss the indictment against Nerayoff.ย 

Nerayoff Strikes Back:

Steven Nerayoff didn’t sit quietly, either. He took to Twitter to present his view that the SEC and the government attempted to co-opt the cryptocurrency industry. He also mentioned he was one of the very few people who had a list of ETH contributors, subtly hinting at the leverage he holds.

To fuel the fire, Nerayoff leaked email conversations dating back to July 21, 2014, which involved Ethereum co-founders Vitalik Buterin and Joseph Lubin. Tagging them as “#CryptoJudas” and “#CrookedElbowJoe” respectively, he appeared to assert that his contributions to Ethereum were being discredited.

Unanswered Questions:

  • Why would the DOJ reject its case despite having a co-defendant’s guilty plea?
  • What are the broader implications of Nerayoff’s potential “contributor list”?
  • Is there a more extensive conspiracy in the Ethereum and wider crypto community?

Is Ethereum facing a karmic reckoning? Long perceived to have received a regulatory “free pass” compared to other cryptocurrencies like XRPโ€”which faced intense scrutiny despite its arguably superior technologyโ€”Ethereum now grapples with its controversies, including scalability issues and governance dilemmas. Only time will tell if this is a small bump in the road or a sign that Ethereum’s luck is running out.

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