SCAMMERS get what they deserve:
HashFlare Heads Get “Time Served” After $577M Crypto Ponzi — DOJ May Appeal
Two ex-HashFlare bosses, Sergei Potapenko and Ivan Turõgin, admitted they ran what prosecutors call a $577 million Ponzi scheme tied to crypto mining contracts. Instead of more prison time, a Seattle judge gave them time served after they’d already spent 16 months in custody.
The court ordered each founder to pay a $25,000 fine and complete 360 hours of community service on supervised release, expected to be carried out in Estonia where they’re from.
Prosecutors are unhappy: they had asked for 10 years behind bars and are considering an appeal of the light sentence. Seattle’s office called this the largest fraud case it has handled.
The fraud allegations are stark: between 2015–2019 HashFlare allegedly took $577M in sales, faked dashboards and returns, and paid earlier customers with funds from newer ones — a textbook Ponzi, officials say. The founders also forfeited over $400M in assets as part of their plea.
Court filings note roughly 390–440k customers bought HashFlare mining contracts (about $487M in sales), and platform payouts since then total about $2.3B — figures that prosecutors used to argue significant consumer harm.
Investigators say the founders diverted millions into personal luxuries — Bitcoin purchases, real estate, cars, jewellery and private jets. The pair were arrested in Estonia in late 2022, extradited to the U.S. in 2024, and pleaded guilty to conspiracy to commit wire fraud.
A side note: immigration paperwork previously caused confusion when U.S. authorities ordered the duo to “self-deport” before sentencing.
Why you should care
This case is a reminder that high-profile crypto scams can be massive in scale, span borders, and still end with contentious outcomes — prosecutors want harsher punishment, victims want stronger deterrence, and the wider market watches for how fraud gets punished in practice.
Source/Credit: Cointelegraph (Brayden Lindrea).
