Deaton Questions Dismissal of Crypto Extortion Charges Against Former Ethereum Adviser

Attorney Deaton asked why the government dismissed the charges against former Ethereum adviser Nerayoff despite going through the pains of securing an indictment.

Attorney John E. Deaton, CryptoLaw founder, and pro-XRP lawyer, has taken to Twitter to question the reason behind the recent dismissal of criminal extortion charges against former Ethereum adviser Steven Nerayoff.

In a tweet today, attorney Deaton, who revealed himself as a former federal prosecutor, asked why prosecutors would go through the trouble of securing an indictment only to dismiss the case later.

Deaton also wondered what would have prompted the prosecutors to dismiss the charges against Nerayoff, especially after the defendant took an offensive approach, accusing the government of prosecutorial misconduct.

Some of Nerayoff’s allegations against U.S. investigators, as cited by Deaton, include the fact that he was placed in a van and asked to provide evidence against Ethereum co-founder Vitalik Buterin, Caitlin Long, founder and CEO of Custodia Bank.

“Nerayoff alleges that he pled not guilty, refused to let the Feds intimidate him, and demanded a trial. Why would the government dismiss?” Deaton quizzed.

Deaton Highlights Possible Reason Behind the Dismissal

Notably, Deaton suggests that the prosecutors may have dismissed the case against Nerayoff due to the validity of his claims.

“My experience tells me that some of his claims had teeth to them, and the Government did not want to engage in discovery. When you add his claims with Chokepoint 2.0 and the Administration’s current war on Crypto, it makes you [Think],“ he added.

Court Dismisses Case Against Nerayoff

For context, Nerayoff and one of his employees, Michael Hlady, were initially accused of extorting an unnamed crypto firm. The Seattle-based company hired Nerayoff and Hlady to provide guidance for its 2017 initial coin offering (ICO).

However, prosecutors allege that both Nerayoff and Hlady threatened to destroy the company if it failed to pay them millions of dollars for their services. While Hlady pled guilty in August 2021, Nerayoff maintained his innocence.

According to reports, U.S. District Judge Margo Brodie dismissed the charges against Nerayoff on May 5, ending a three-and-a-half-year legal battle between the former Ethereum adviser and federal prosecutors.

The lawsuit was struck out six weeks after prosecutors requested to drop the case due to their inability to prove the charges against Nerayoff.