Alchemist CEO Steven Nerayoff allegedly extorted an unrevealed Seattle company for over $10 million in Ethereum. Only one company fits the bill—StormX.

Steven Nerayoff, CEO of Alchemist, LLC blockchain consultancy, was charged with extortion. Nerayoff was a technology entrepreneur with an impressive track record. His consultancy advertises that they have invested or advised projects including Ethereum, Zcash, Algorand, Lisk, Bancor, and others.

In July 2017, Nerayoff entered into an agreement with a Seattle-based company to help support their initial coin offering. For revising the company’s whitepaper, facilitating strategic partnerships, curating pre-seed funding partners, and other services, the agreement would entitle Nerayoff to 22.5 percent of all funds raised and 22.5 of all cryptocurrency tokens issued through the ICO.

Then, Nerayoff undertook various threats to extract additional compensation from the company while providing no additional services, going as far as to hire a hitman, Michael Hlady, with an imposing background in national intelligence that included “taking down a head of state.”

The company raised a total of 75,700 ETH during the pre-sale and crowdsale periods. Under the original agreement, Nerayoff would have been entitled to 17,000 ETH as payment. However, he threatened to sabotage the crowdsale, generate negative press for the company, and contact influential people to “destroy” the company if he was not paid an additional 13,000 ETH, worth approximately $3.8 million at the time.

Hlady, on behalf of Nerayoff, then physically intimidated executives from the company for an additional ‘loan’ of 10,000 Ether, according to the documents. The company paid the 10,000 loan to Nerayoff’s company and was never repaid.

Both men were arrested yesterday for the extortion charges. The two men face up to 20 years in prison if convicted.

Of the companies in Seattle’s relatively small blockchain ecosystem, only one company fits the description made in the legal complaint—StormX.

The Department of Justice described the firm as “a startup mobile-based business that specializes in generating user traffic to clients’ products by issuing its own cryptocurrency tokens as loyalty rewards.” With less than 15 notable blockchain companies in Seattle this already narrows down the list.

StormX is a gamified microtask platform which “creates oppotunities for people around the world to earn cryptocurrency rewards.” Its main product is the mobile Storm Play app, where users can, for example, complete tasks in games or complete surveys for native STORM tokens.

In line with the court complaint, Storm’s crowdsale began Nov. 7, 2017. The amounts described in the complaint are also in line with public figures from Storm’s crowdsale.

“John Doe” and “Jane Doe,” as described in the court documents, are likely the current CEO of StormX Simon Yu and former COO Arry Yu (no familial relation). Arry Yu left Storm in September 2018 because of “disagreements” with the CEO, as she said in earlier comments to CryptoSlate. It’s unknown whether the extortion charges are related to her departure from the startup.

Neither Simon Yu or Arry Yu have responded to CryptoSlate’s requests for comment.

This story is developing and will be updated with more information within the hour.

The post StormX was the company allegedly extorted by Alchemist CEO Steven Nerayoff appeared first on CryptoSlate.

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