HashFlare

The co-founders of defunct crypto mining company HashFlare, Sergei Potapenko and Ivan Turõgin, have avoided additional prison time after pleading guilty to their roles in a $577 million Ponzi scheme.
Seattle Federal Court Judge Robert Lasnik sentenced both men to time served — the 16 months they had already spent in custody — along with $25,000 fines each, 360 hours of community service, and supervised release to be served in their native Estonia.
The Department of Justice (DOJ) confirmed on Tuesday that it is considering an appeal, following prosecutors' request for 10-year prison terms for the defendants. The sentencing follows the pair’s February plea deal in which they forfeited over $400 million in assets.
Largest Fraud Case in Seattle Court History
Federal prosecutors described the case as the largest fraud ever tried in the district, alleging that from 2015 to 2019, HashFlare generated over $577 million in sales by faking mining capacity and investor returns.
The scheme operated as a classic Ponzi, according to Acting U.S. Attorney Teal Luthy Miller. “They diverted millions to their benefit, purchasing Bitcoin, real estate, luxury cars, expensive jewelry, and taking more than a dozen private jet trips,” Miller said.
Prosecutors argued that 440,000 customers were affected, but Judge Lasnik noted that 390,000 of them — who spent $487 million on mining contracts — had withdrawn a total of $2.3 billion over time, mitigating claimed losses.
Arrest, Extradition, and Plea
Potapenko and Turõgin were arrested in Estonia in November 2022, held for 16 months, and extradited to the U.S. in May 2024. They pleaded guilty to conspiracy to commit wire fraud, admitting to using new customer funds to pay earlier investors while siphoning millions for personal use.
In April, their lawyers revealed a letter from the Department of Homeland Security ordering them to “deport immediately,” despite a court order requiring them to remain in the U.S. until sentencing — confusing their status. Both men had repeatedly expressed a desire to return home.
DOJ May Appeal
The DOJ has yet to announce whether it will formally challenge the sentence. Prosecutors maintain that the scale and deliberate nature of the fraud warranted a much harsher penalty.
The post appeared first on CryptosNewss.com
#HashFlare $BTC

The two Estonian co-founders of the cryptocurrency mining platform HashFlare – Sergei Potapenko and Ivan Turõgin – are facing a bizarre legal situation in the U.S.: the Department of Homeland Security (DHS) has demanded they leave the country immediately, while the court is still requiring them to remain in Washington to await sentencing.

DHS 'nudges' despite the court not allowing them to leave

On April 6, both Potapenko and Turõgin received an email from #DHS with a brief but coercive message: “It’s time to leave the United States.” They were warned they would face “enforcement actions by law enforcement,” including criminal prosecution, civil penalties, and other serious consequences if they do not leave U.S. territory.

Two Estonian citizens, Sergei Potapenko and Ivan Turõgin, have pleaded guilty to defrauding $577 million in the HashFlare Ponzi scheme, promising cryptocurrency mining but actually lacking the computing power to deliver as promised.
Sophisticated Crypto Investment Scam
#HashFlare advertised as a cloud cryptocurrency mining service, attracting over $577 million from investors from 2015 to 2019.
In reality, the company did not have enough mining equipment, used fake data to create the illusion of phantom profits, and defrauded investors.