USA: Two men arrested for defrauding a cryptocurrency startup

Crypto News

US police have apprehended two individuals who have claimed a ransom of several million dollars in cryptocurrency to a crypto-startup.

A case of extortion

The New York District Attorney’s Office and the FBI have jointly arrested Steven Nerayoff and Michael Hlady. The two defendants appeared in court for extorting money from a company operating in crypto-assets.

Nerayoff is a lawyer. He reportedly worked with Hlady on a Seattle-based company’s Initial Coin Offering (ICO) deal. Without providing the agreed services, the two criminals demanded millions of dollars in cryptocurrency from their victim.

The suspects deliberately intimidated their client by claiming to want to sabotage the ICO and destroy the startup, according to the explanations of the prosecutor Richard P. Donoghue:

“As alleged, Nerayoff and Hlady proceeded to an old-fashioned shakedown, to be reimbursed with the virtual currency of the 21st century. Our Bureau and our FBI partners are committed to protecting companies from extortion, whether it’s US dollars or cryptocurrencies. “

A form of classic scam?

William Sweeney, deputy director of the FBI, confirms that this is a usual extortion strategy, but rehabilitated in the current era.

“Imposing stringent requirements on a company for personal gain is risky, and one prefers to be paid in cryptocurrency or cash. The FBI will continue to seek justice for the victims whose businesses have been the target of this type of scam. “

The two criminals were able to extract 1.2 million dollars in Bitcoin over a period of one year, according to a report from Symantec.

In May, 63 swindler purses were credited with stolen funds totaling 12.8 BTC.

What do you think of the US case of cryptocurrency extortion? React in the comments below.

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