Shocking Developments in the Startup World

In a surprising turn of events, Techstars has chosen to sever its partnership with the Alchemist Blockchain Accelerator, which had formed just a year ago. The decision comes in the wake of serious legal troubles faced by Alchemist’s co-founder, Steven Nerayoff, who was recently arrested on charges of extortion.

The Backstory: When Partnerships Go Bad

Formed in July 2018, the partnership was intended to foster innovation and growth within the blockchain community. However, everything unraveled when Nerayoff’s alleged illicit activities came to light.

According to reports, Nerayoff and his associate, Michael Hlady, allegedly demanded a hefty $4.45 million from an undisclosed startup. Prosecutors described their actions as an “old-fashioned shakedown.” It paints a bleak picture for a partnership that once held promise.

FBI’s Stance on the Matter

In an official statement, William F. Sweeney, the assistant director in charge of the FBI, made it clear that such activities won’t be tolerated, describing them as highly “risky business.”

“Imposing forceful demands on a company for personal gain is risky business, whether one’s preference is to be paid off with cryptocurrency or cold hard cash.”

Techstars Takes Action

The swift action taken by Techstars to distance their brand from Nerayoff and Alchemist was described as a “necessary” step. The company knows that in the world of startups, reputation is everything, and maintaining a clean record is vital for future success.

Nerayoff’s Rocky Road in the Crypto Space

As an early advisor to Ethereum, Nerayoff was once seen as a promising figure in the cryptocurrency world. He even predicted a boom year for Ether in early 2018. Unfortunately, for him and many investors, a brutal bear market saw Ether’s value plummet around 90%, leaving his star diminished.