Individual Pleads Guilty in Brooklyn Federal Court to Extorting Cryptocurrency from Startup Company | USAO-EDNY

Marie C. Delgado

Earlier nowadays, in federal court docket in Brooklyn, Michael Hlady pled guilty prior to United States Chief District Courtroom Choose Margo K. Brodie to conspiring to extort a startup firm for thousands and thousands of bucks in the cryptocurrency Ether (ETH).  When sentenced, Hlady faces up to 20 decades in jail, as very well as a fantastic. 

Mark J. Lesko, Performing United States Legal professional for the Japanese District of New York, announced the responsible plea.

“Hlady and his co-conspirator applied sturdy-arm techniques to shake down a startup company of cryptocurrency and will now deal with punishment just like any individual else who extorts a organization,” mentioned Performing United States Attorney Lesko.  “This Workplace and its legislation enforcement companions are fully commited to protecting companies from extortion in whichever method it is perpetrated.”  Mr. Lesko thanked the Federal Bureau of Investigation, New York Area Place of work, for their exceptional do the job on the case.

As established forth in court filings and at today’s proceeding, the victim firm (“Company”) was a startup cellular-based business that issued cryptocurrency tokens such as Ether as loyalty benefits for building person targeted visitors to its clients’ goods.  To increase money, the Company planned to carry out an First Coin Offering (“ICO”) in November 2017. In connection with the ICO, Hlady told the Company’s executives that he had been a section of the Irish Republican Military, the National Protection Company, the Central Intelligence Company and the Federal Bureau of Investigation that he experienced been shot at and experienced killed people today and that he experienced “taken down” a head of state.  In March 2018, Hlady and his co-conspirator Steven Nerayoff issued threats to Corporation executives that provided destruction of the Enterprise if it did not agree to needs for supplemental resources and Corporation tokens.  On March 28, 2018, Hlady despatched a text message to a Company executive stating, in aspect, “I assure I will damage your community” if the Organization did not comply with the demands.  As a end result of this threat, the Company transferred 10,000 ETH to Nerayoff.

Nerayoff has entered a plea of not guilty to extortion prices and is awaiting demo.

The government’s scenario is getting handled by the Office’s Organization and Securities Fraud Section.  Assistant United States Attorneys Mark E. Bini and Andrey Spektor are in charge of the prosecution. 

The Defendant:

MICHAEL HLADY (also recognised as “Michael Peters”)
Age:  48
East Greenwich, Rhode Island

E.D.N.Y. Docket No. 20-CR-8 (MKB)


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