Nerayoff is a name known as one of the early advisors of the Ethereum network. However, it came to the fore recently with a blackmail case filed by the United States in 2019. Nerayoff claims that he hired Covington & Burling to defend him in this case and that the firm mishandled his defense.

In his lawsuit filed Sept. 6 in New York County Superior Court, Nerayoff said Covington attorney Alan Vinegrad advised him not to turn over videos of “negotiations with the alleged victims” and emails and other messages to U.S. prosecutors.

Nerayoff argued that this evidence would, in fact, prove that his transactions were completely legal. However, he claims that the litigation process developed against him because this evidence was not presented.

The events started on September 18, 2019. Nerayoff and his partner, Michael Hlady of blockchain consulting firm Alchemist, were arrested after prosecutors accused him of extorting a cryptocurrency startup.

Prosecutors alleged that Nerayoff and Hlady threatened the crypto startup by extorting money. However, Nerayoff argues that these accusations are baseless and that this situation would not have happened to Covington if he had defended himself more effectively.

Nerayoff delivered the necessary evidence to prosecutors in June 2022. This evidence included videos of interviews with the alleged victims and email correspondence. In May 2023, the charges were dropped following the presentation of this evidence. According to Nerayoff’s claim, if this evidence was presented in the first place, the case could have ended before it even started.

In his lawsuit, Nerayoff stated that this entire process could have been avoided had Covington attorneys “presented clearly exculpatory evidence to prosecutors” in the fall of 2019. So, he claimed, his life had to be mired in a complicated litigation process for years due to the faulty advice of his lawyers. Covington flatly rejected these allegations and stated that the case was completely baseless and that they would make a strong defense against it.

Nerayoff’s legal complaint states that Covington withdrew his representation after he was sued on January 10, 2020, and as a result spent more than $1 million on legal fees over the past three years.

In the process, Nerayoff allegedly became incapacitated and lost other important contracts in the cryptocurrency space. His current lawyer, Romeo Salta, is demanding compensation of over $100 million from the court.

This lawsuit is just one of several lawsuits Nerayoff has filed this year. In April, he filed a $9.6 billion lawsuit against the government, alleging that he was knowingly and maliciously investigated and prosecuted during the racketeering case.

In July, he filed a $10 million libel lawsuit against Tyler Fayard, known as the “Boring Sleuth” on social media, for online defamation.

As a result, this lawsuit filed by Nerayoff against the law firm Covington promises to be a long-term legal battle.