Former advisor-turned whistle-blower Steven Nerayoff has alleged a number of incidents of misconduct by early Ethereum insiders, following-through with his promise to reveal critical evidence on record.

Last week, Nerayoff promised a bombshell reveal of 2015 recordings which purports to indicate potentially fraudulent behaviour during Vitalik Buterin’s shaky beginnings as a blockchain company founder. The conversations reveal how Buterin turned to Nerayoff for guidance in order to navigate a crisis, highlighting cracks in the organisation’s structure and flailing leadership during Ethereum’s formative days. The recording also disentangles widely held assertions about the supposedly decentralised nature of the Ethereum project.

Specifically, Nerayoff emphasised flaws and misconduct relating to Ethereum’s financials, organisational structure and regulatory risks related to ICO promotions, securities risks, tax compliance, personal conduct and transfer pricing regulations. Throughout the five conversations, Neryaoff is seen as providing advice to Ethereum’s Vitalik Buterin, including comments that under Joseph Lubin and other co-founders, Ethereum faced problems of general incompetence.

If accurate, the revelations could damage Vitalik’s reputation, as well as clarify the actual status of decentralisation for the proof-of-stake blockchain. The release comes at a time when Ethereum is struggling to keep up with Bitcoin on a relative basis, with capital consistently rotating to BTC since September 2022.

For context, Neryaoff is best characterised as someone who makes bombastic, sweeping statements which are sometimes difficult to fully understand. He was a former advisor to the Ethereum Foundation and speaks with some authority these days. In May 2023, a New York judge dismissed extortion charges (since 2019), clearing his reputation in the process.

Nerayoff had been organising the release of the recordings for months, teasing out details every week.

Overview of topics covered

The full recording and transcript were released on X, covering a wide range of topics. During the conversations, Nerayoff assessed Ethereum’s deficiencies and proposed major changes to the organisation, suggesting that most, if not all, of the organisation’s members had to be replaced.

The discussions included the following topics:

  • A lack of operational infrastructure, especially in Switzerland, which was critical for administrative work.
  • Legal and ethical concerns regarding Ethereum’s financial decisions, such as a failure to hedge and speculation on Bitcoin’s value.
  • Regulatory risks associated with money transfers, tax compliance and the promotion of ICOs, potentially unregistered securities.
  • Poor internal structure with unclear roles and disjointed teams.
  • Issues with supposed co-founders relating to behaviour, communications and competency.
  • Necessity for Vitalik to save face, rebrand the organisation and increase community outreach.

As detailed in a report from, the “Rescue and Restructure Plan” focused on Vitalik Buterin being solely responsible for Ethereum’s aimlessness at the time, with Nerayoff explaining that the organisation had to transition from a non-profit to a for-profit model.

Buterin pushed back against insinuations of his being personally responsible for Ethereum, saying “right now, Ethereum isn’t really a company, it’s more of an idea, coupled with a non-profit organisation that happens to have some quantity of money attached to it that’ll last us another year.”

Ethereum’s reputation on the line?

The release of recordings and restructuring plan partly suggest that Vitalik Buterin was looking for guidance at the time.

The recordings have generated some discussion in Twitter circles, yet crypto news outlets appear hesitant to shine too bright a light on the bombshell release so far.

Many still view Ethereum as ‘the future of finance’ or the backbone of ‘Web3.0’. Others view the release as a confirmation of long-held doubts about the supposedly decentralised nature of Ethereum, who can now hold up Nerayoff’s evidence to buttress their criticism of the platform. Others still urge rigorous examination of the evidence.

Regardless, it’s hard to imagine a long-term outcome that does not damage confidence in Ethereum, given that the revelations highlight fundamental shortcomings in the project any which way one looks at it.

The revelations come at a time when Ethereum’s price trajectory has stagnated, with competitor companies such as SBF-backed Solana and Polygon making inroads into the so-called dApp space. To this day, public messaging tends to emphasize decentralisation and censorship resistance, both of which appear to be increasingly in question today.

Suffice it to say that over the years, Ethereum has struggled to remain on both sides of the fence. The ‘decentralisation’ narrative appears to have run its course, with November 16th 2023 potentially marking a new chapter for Vitalik and co.

Beyond that, the long-term ramifications concerning an ostensibly inept leadership, as characterised throughout Nerayoff’s unflattering criticism of Ethereum, might also accelerate erosion of Vitalik’s public image, and Ethereum by extension.

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