Steven Nerayoff, a tycoon in the blockchain space, has taken legal action against Covington & Burling. Nerayoff, the founder of the blockchain consultancy firm Alchemist, decided to sue the law firm for $100 million on the grounds of mishandling in an extortion case dated back to 2019, in which the law firm represented Nerayoff against the United States.
Nerayoff claims Alan Vinegrad, a lawyer from the Covington firm, advised him against turning over video and email evidence of “negotiations with the alleged victims.” Nerayoff believes his videos were ‘entirely lawful’ and there were no proper grounds not to turn them over to U.S. prosecutors. This led to the arrest of Nerayoff and Micahel Hlady, an associate of Alchemist, who were charged with extortion of a cryptocurrency startup.
Nerayoff stated that he provided prosecutors with the video and email evidence in 2022, and all accusations were dismissed by May 2023. Nerayoff asserted that the whole arrest debacle could have been “staved off” if the Covington lawyers had not given him wrongful legal advice regarding the 2019 case. The law firm, however, has called the legal proceedings “meritless” and will not step back from defending itself “vigorously.”
The court complaint of Nerayoff continues to claim that Covington had quit representing the then-defendant in January 2020 after his sentencing. The founder’s lawyer, Romeo Salta, has also claimed that he spent around $1 million on his legal expenses. Salta elucidated further, saying, “[The monetary claim is] to be determined at trial but not less than” $100 million because, as a result of the indictment, he was unable to “engage in business” and “lost other contracts in the crypto space.”
Nevertheless, this lawsuit is not the only one Nerayoff has filed this year. In April, he initiated a $9.6 billion lawsuit against the U.S. government, claiming that the investigation he faced during the 2019 case was conducted in an ill-gotten manner. Further, he started another $10 million defamation case against the “Boring Sleuth” social media personality on the grounds of ‘defamation.’
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