Bitcoin

Million

Two Estonian nationals, Sergei Potapenko and Ivan Turõgin, both 39, appeared in court in Seattle for their alleged roles in a massive cryptocurrency fraud involving HashFlare. The trial, following their arrest in Tallinn, Estonia, in November 2022, stems from an 18-count indictment by the Western District of Washington. The indictment covers activities from 2015 to 2019, during which the defendants purportedly operated a fraudulent crypto mining service, according to <a href="https://decrypt.co/233217/trial-begins-for-575-million-hashflare-crypto-mining-fraud-defendants">Decrypt</a>. 
HashFlare enticed hundreds of thousands of victims to purchase mining contracts worth over $550 million. These contracts promised shares of virtual currency supposedly mined by HashFlare's extensive operations. However, the DOJ claims that HashFlare had minimal mining capacity, conducting less than 1% of the Bitcoin mining it advertised. When investors attempted to withdraw their earnings, Potapenko and Turõgin allegedly resisted payments or used Bitcoin bought on the open market instead of mined Bitcoin. 
In addition to the mining fraud, Potapenko and Turõgin are accused of a separate scheme in May 2017, where they raised at least $25 million through investments in Polybius, a company they claimed would become a virtual currency bank. Despite promising dividends from Polybius' profits, the bank was never established, and the funds were allegedly diverted to accounts controlled by the defendants. 
The indictment also includes charges of money laundering. The DOJ alleges that the defendants laundered the fraud proceeds through shell companies, phony contracts, and invoices, using the funds to acquire 75 real estate properties, six luxury vehicles, cryptocurrency wallets, and thousands of cryptocurrency mining machines. 
Potapenko and Turõgin face multiple charges, including conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering. Each charge carries a maximum penalty of 20 years in prison. The trial continues as the DOJ seeks justice for the victims of this extensive fraud.

Trial Begins for Defendants in $575 Million HashFlare Crypto Mining Fraud Case

Ultramining_Eng

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