Two individuals from Estonia, Sergei Potapenko and Ivan Turõgin, both aged 39, have appeared in a Seattle court for their alleged involvement in a significant cryptocurrency scam related to HashFlare. The legal proceedings, following their apprehension in Tallinn, Estonia, in November 2022, are based on an 18-count indictment issued by the Western District of Washington. This indictment spans the years 2015 to 2019, during which the defendants are said to have operated a deceitful crypto mining service, as reported by Decrypt. HashFlare managed to entice numerous individuals to invest in mining contracts amounting to over $550 million. These contracts promised returns in virtual currency supposedly generated by HashFlare's expansive mining operations. Nevertheless, according to the Department of Justice (DOJ), HashFlare had limited mining capabilities, barely conducting 1% of the Bitcoin mining as advertised. When investors requested their profits, Potapenko and Turõgin reportedly delayed payments or used purchased Bitcoin instead of mined coins.

Apart from the fraudulent mining activity, Potapenko and Turõgin are accused of another scheme in May 2017, where they raised a minimum of $25 million through investments in Polybius, a company they claimed would evolve into a virtual currency institution. Despite pledging dividends from Polybius' revenues, the bank never materialized, and the funds were apparently diverted to accounts under the defendants' control.

The indictment also encompasses allegations of money laundering. The DOJ contends that the defendants laundered the illicit proceeds through shell corporations, false contracts, and invoices, utilizing the funds to acquire 75 real estate assets, six luxury vehicles, cryptocurrency wallets, and numerous cryptocurrency mining devices.

Potapenko and Turõgin are confronting several charges, including conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering. Each offense carries a maximum sentence of 20 years in prison. The trial progresses as the DOJ seeks accountability for the victims impacted by this widespread fraud.