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.

  • Sergei Potapenko and Ivan Turõgin also admitted to running a fraudulent ICO named Polybius, raising $31 million for a digital banking project but failing to deliver on any promises to investors.

Consequences and Severe Penalties

  • Both face a sentence of up to 20 years in prison for conspiracy to commit wire fraud, with sentencing scheduled for May 8.

  • U.S. courts seized $400 million in assets from the two fraudsters, including real estate, luxury cars, and cryptocurrency accounts.

  • The FBI and international agencies coordinated the investigation, leading to the arrest of two defendants in #Estonia on November 20, 2022, who were subsequently extradited to the U.S. for trial.

Sophisticated Money Laundering Scheme

  • Potapenko and Turõgin laundered fraudulent money through:

    • 75 properties and 6 luxury cars.

    • Cryptocurrency wallets and thousands of crypto mining machines.

  • #FBI is calling on victims of HashFlare to provide information through a specialized website to assist with the investigation.

The U.S. Major Crackdown on Crypto Fraud

  • The HashFlare case is part of the U.S. effort to crack down on cryptocurrency fraud.

  • In 2024, the U.S. Attorney's Office in Washington collected $1.51 billion in fines, including $4.3 billion from Binance for regulatory violations in the U.S.

Risk Warning

Investing in crypto always carries high risks and is not suitable for everyone. The HashFlare case serves as a warning for investors to be cautious of projects promising unrealistic profits and to conduct thorough research before investing.