HashFlare founders Sergei Potapenko and Ivan Turogin appropriated a total of up to 575 million USD from hundreds of thousands of investors around the world.
The mastermind of the 570 million USD fraud HashFlare "escaped" extradition to the US
Reported by local Estonian news site Postimees , Bitcoin mining company HashFlare co-founders Sergei Potapenko and Ivan Turogin have successfully appealed their extradition from Estonia to the United States, where they must face charges. faces 18 counts of fraud and money laundering.
Bitcoin mining company HashFlare co-founders Sergei Potapenko and Ivan Turogin successfully appealed their extradition from Estonia to the United States
As Coin68 reported , HashFlare began operating in 2015 with a business model of providing “remote Bitcoin mining services”, previously named HashCoins - said to be a manufacturer of Mining equipment . Investors who deposit money into the project will receive a “part of the profits” up to 150% from mining .
However, HashFlare actually mines less than 1% of the total hashrate sold to customers, being accused of being more of a Ponzi scheme than a genuine Mining operation.
After that, HashFlare was denounced by customers when the contract payment amount was lower than the service fee, leading to the balance not being added to the account. Along with evading payment obligations when customers tried to withdraw money, Potapenko and Turogin gave many reasons why they could not withdraw, or forced customers to perform multiple KYC verifications to increase withdrawal limits.
By mid-2019, HashFlare officially closed. On November 20, 2022, both Potapenko and Turogin were arrested in Tallinn, Capital of Estonia.
According to a previous indictment by a Court in Talinn, Sergei Potapenko and Ivan Turogin used cover companies to commit money laundering, paying for 6 luxury cars, 75 real estate projects, and wallets. cryptocurrency and thousands of cryptocurrency mining devices, in total "stole" 550 million USD of customers' money - considered one of the largest cryptocurrency scams in history.
If the extradition is successful, a trial will be held in the Western District of Washington - United States with a sentence of up to 20 years in prison for the two founders of HashFlare.
With the latest announcement from the Tallinn Circuit Court, Turogin, Potapenko and their families will receive more than 100,000 euros (equivalent to 110,000 USD) in compensation. However, this decision is still awaiting appeal from the United States before December 11, 2023.
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