Key Takeaways:
- HashFlare co-founders Sergei Potapenko and Ivan Turõgin pleaded guilty to conspiracy to commit wire fraud in a $577M crypto mining fraud scheme.
- The duo falsely claimed HashFlare had substantial mining power, misleading investors between 2015 and 2019.
- They agreed to forfeit over $400M in assets to compensate victims, with sentencing set for May 8 in Seattle.
Estonian nationals Sergei Potapenko and Ivan Turõgin, co-founders of the fraudulent crypto mining firm HashFlare, pleaded guilty to conspiracy to commit wire fraud in a $577 million scheme.
Arrested in Estonia in 2022 and later extradited to the U.S., they now face up to 20 years in prison.
Two Estonian Nationals Plead Guilty in $577M Cryptocurrency Fraud Scheme
— Criminal Division (@DOJCrimDiv) February 13, 2025
Scheme Victimized Hundreds of Thousands of People in United States and Abroad
🔗: https://t.co/hsedkgnOtN pic.twitter.com/SsSChivnXv
From 2015 to 2019, the pair convinced investors to rent mining power from HashFlare, promising a share of the cryptocurrency generated.
However, court documents revealed that HashFlare had less than 1% of the mining power it claimed.
Instead of generating real mining profits, the company either delayed investor withdrawals or used purchased cryptocurrency to cover payments.
Despite pleading guilty, their defense argues that investors were not financially harmed, claiming that HashFlare operated legitimate businesses and did generate cryptocurrency.
🚨🇺🇸🇪🇪ESTONIAN DUO PLEADS GUILTY IN $577M CRYPTO FRAUD
— Mario Nawfal (@MarioNawfal) February 13, 2025
Sergei Potapenko and Ivan Turõgin, just pleaded guilty to running a massive cryptocurrency fraud through their company, HashFlare, scamming hundreds of thousands of people worldwide, including in the U.S.
They promised… pic.twitter.com/2GA6IYy6C1
However, prosecutors allege that Potapenko and Turõgin used investor funds to buy luxury real estate and high-end vehicles.
As part of their plea deal, they have agreed to forfeit over $400 million in assets, which will go toward compensating victims.
Their sentencing is scheduled for May 8 in Seattle.
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