On Tuesday, Steven Nerayoff, a former advisor to the ethereum network, filed a lawsuit against the US government, seeking $9.6 billion in damages. The lawsuit, filed under the Federal Tort Claims Act (FTCA), accuses the government of false prosecution and a series of other serious allegations spanning from 2019 to 2023.
ethereum Insider vs. The US government
Nerayoff twitter.com/StevenNerayoff/status/1777691121595863248″ target=”_blank” rel=”noopener nofollow”>advertisement of the lawsuit came via a post on with false processing. “It is time for us to take a stand against this rampant corruption, for all those wrongfully accused, and to ensure justice against those who have been a part of this.”
He extended his thanks to Fox Business' Eleanor Terrett for making the lawsuit public, as well as his attorney Michael Scotto and others involved in bringing attention to the case. Terrett, via his post on and alleged mistreatment by federal agents between 2019 and 2023.
The lawsuit alleges that certain federal agents were aware of the baseless nature of the charges against Nerayoff and engaged in harassment, intimidation, and fabrication of evidence to prosecute him under the Hobbs Act for racketeering. Despite the dismissal of the federal indictment against Nerayoff “with prejudice” in May 2023, legal documents argue that the damage to Nerayoff's reputation and business justifies the substantial claim for damages.
The involvement of former Manhattan Assistant District Attorney Michael Scotto and renowned attorney Alan Dershowitz as a constitutional consultant adds significant weight to the case. Dershowitz highlighted the exceptional nature of Nerayoff's situation: “I strongly oppose prosecutors targeting individuals, which is why I agreed to serve as Mr. Nerayoff's constitutional consultant.”
The detailed lawsuit documents provide a chilling narrative of alleged abuses of power by federal agents and officials, including physical assaults, false arrests, unlawful detentions, and malicious prosecutions. In particular, the documents reference a comment by an Assistant U.S. Attorney (AUSA) that the federal government was willing to “eat a shit sandwich,” a metaphor for the government's alleged willingness to cover up unlawful, negligent and unconstitutional actions. to maintain the illusion of legitimate law enforcement in the crypto space.
“The federal government was willing to 'eat a shit sandwich' and ignore the unconstitutional and unauthorized actions of federal agents and/or officials to maintain the public appearance that the DOJ and SEC were engaged in legitimate, well-informed law enforcement. and sexy. law enforcement actions in the crypto space…,” state Nerayoff and his legal team.
Additionally, the lawsuit accuses federal prosecutors, agents and officials of prioritizing their personal reputations and professional prospects over justice, at the expense of Nerayoff's constitutional rights and livelihood. “Such collateral damage was offset by the shared desires of federal prosecutors, agents, and officials to build their own reputations and resumes in the cryptocurrency landscape and in the lucrative private sectors,” the lawsuit alleges.
These allegations suggest a systemic problem in federal authorities' handling of cryptocurrency cases, and Nerayoff's experience serves as a potential watershed moment for others in the industry. The lawsuit alleges: “By eating that 'shit sandwich,' federal prosecutors, agents and officials ignored how they were violating Mr. Nerayoff's constitutional rights and destroying his life under color of law.”
At the time of this publication, the price of ethereum stood at $3,534.
Featured image from YouTube, chart from TradingView.com
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