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Steven Nerayoff, one of the earliest advisors for Ethereum, has had various debates and discussions concerning Ethereum in the past few weeks. The former lawyer for the crypto firm has never wavered from his position that Vitalik Buterin and Joseph Lubin, the co-founders of Ethereum, engaged in fraudulent activity during the early days of the network and that the SEC was corrupt in its dealings with Ethereum.

While speaking in a Space hosted on social media platform X, Nerayoff revealed he has recorded proof that could heavily implicate Ethereum co-founder Vitalik Buterin.

Former Ethereum Advisor Claims to Have Proof of Fraud

Nerayoff has always asserted that the extent of fraud in the Ethereum ecosystem’s early days surpasses the scale of the FTX scandal, which led to the exchange’s bankruptcy. This saga has continued in this high-stakes battle over the transparency and decentralization of one of crypto’s largest ecosystems.

Nerayoff had been initially talking with other speakers on the podcast about the SEC’s plan to ultimately decide who and what becomes a security in the crypto industry before switching topics to the ETHGate scandal.

According to Nerayoff, the Ethereum Foundation had run into troubles in 2015 as it actually looked like it was going under. Buterin reportedly ran to Nerayoff for help to save and restructure the foundation, as he had created the utility token and ICO for ETH. 

Nerayoff mentioned this conversation with Vitalik ran up to three hours, and he had it recorded, and it is ready to be released as a free NFT and a transcript in the next four to five days.

“So he asked me to restructure the entire Ethereum Foundation to save it and I’ve got the whole thing recorded. I’m going to drop it. We’re doing it as an NFT. It’s free, but everybody can have it,” he said.

The Ethereum former advisor also talked about how the SEC basically gave a free pass to Ethereum amidst the ETH Gate scandal. The SEC had initially considered ETH’s utility token as a security before former director Will Hinman gave a speech noting that BTC and ETH were decentralized and not securities. On the other hand, the SEC went after Ripple and XRP on claims of centralization.

However, Nerayoff is of the notion that ETH was centralized when the speech was made, and neither Joe Lubin nor Vitalik Buterin could boast of its decentralization at that point. Furthermore, Nerayoff noted that there was internal documentation at that point that indicated that the network hadn’t met the requirements in order for it to be decentralized.

This internal documentation was reportedly only accessible by Nerayoff, prompting regulators to go after him on charges of extortion. Prosecutors have since dropped these charges, but Nerayoff claims it was all a setup. He also claimed the SEC, FBI, and the DOJ fabricated the evidence, and it was all done in a bid to take him out. 

Nerayoff’s accusations have been explosive and threaten to shake investor confidence in Ethereum. Many members of the XRP community have also questioned the SEC’s inconsistencies.

Nerayoff failed to go into details of his conversation with Buterin, and he said he wasn’t going to mention which particular laws were broken. Still, he did insinuate that it contained proof that Ethereum’s early founders themselves did not believe the network was decentralized during its launch. 

The release of Nerayoff’s recording could spur legal action against Buterin and other ETH founders. When asked if his recorded evidence could lead to criminal charges for Buterin and Lubin, Nerayoff said that’s up to the SEC and the DOJ.

Ethereal price chart from Tradingview.com (Ethereum insider Steven Nerayoff)

ETH bulls still holding price steady above $2,000 | Source: ETHUSD on Tradingview.com

Featured image from Fortune, chart from Tradingview.com


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