Sentence 'time served'
The co-founders of HashFlare, Sergei Potapenko and Ivan Turõgin, were sentenced to 16 months in prison, time they had already served in custody — between Estonia and the U.S. — and will not face more time after their sentencing. Additionally, each must pay a fine of $25,000 and complete 360 hours of community service under supervision upon their return to Estonia.
Scale of the fraud
Between 2015 and 2019, HashFlare raised over $577 million by selling fake cryptocurrency mining contracts, using misleading dashboards that displayed fictitious returns. This scheme affected at least 440,000 investors worldwide.
Asset confiscation
Assets worth over $450 million were seized and forced searches conducted, including cryptocurrencies, cash, real estate, vehicles, and mining equipment. These assets will be allocated for a restitution process to compensate the victims.
Prosecutors seek appeal
Prosecutors originally sought sentences of 10 years, describing the case as one of the largest frauds handled by the Washington district. Currently, the Department of Justice is evaluating whether to appeal the decision, arguing that the impact on the victims was significant despite some reimbursements.
Implications and context
| Mild judicial punishment
The sentence has been described as lenient by many analysts and authorities, considering that the scheme harmed both the assets and emotional well-being of thousands of affected individuals.
| Risks of unregulated crypto
This case highlights the vulnerabilities of the crypto market to fraud when there is a lack of transparency and effective regulation for Ponzi schemes or unverified services.
| How to proceed if you were affected
The public prosecutor invites victims to seek information about the compensation process, supported by official pages such as the Department of Justice or the FBI.