Two Estonian citizens pleaded guilty to orchestrating a fraudulent cryptocurrency scheme using a fake mining service, resulting in investor losses of over $577 million.
Court decision and asset forfeiture
Sergei Potapenko and Ivan Turõgin agreed to forfeit assets worth more than $400 million to compensate affected investors. Further details on the compensation process will be announced later.
Case details
The company HashFlare, owned by Potapenko and Turõgin, managed to collect more than $577 million since 2015. However, the firm lacked the computing power needed for the mining contracts they offered.
Investigation and consequences
Potapenko and Turõgin were detained in November 2022, and the US requested their extradition. After a renewed appeal, it was approved, and in January 2024, they pleaded guilty. They each face up to 20 years in prison.
This prominent fraud case attracted international attention, underscoring the importance of oversight in cryptocurrency operations.
