Estonian Scammers Fall: $577 Million Crypto Hashflare Ponzi Scheme Busted

The US Attorney’s Office for the Western District of Washington announced on February 13 that authorities had secured $400 million in seized assets as part of their plea agreement.

The two operated HashFlare, a company that sold cryptocurrency mining contracts to customers. However, instead of mining, they manipulated data to make it seem like mining was occurring. In reality, the company lacked the computing power needed to deliver the services it claimed.

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The defendants have agreed to forfeit various assets, including real estate, luxury vehicles, and cryptocurrency accounts, which were obtained through their fraudulent activities.

Potapenko and Turõgin also admitted to running a separate scam in 2017 under the name Polybius. This project, marketed as an Initial Coin Offering (ICO) for a digital bank, raised around $31 million.

The FBI Seattle office said in a November 2022 statement, "Instead of using the proceeds to create a digital bank, Turõgin and Potapenko used a large portion of the proceeds for their own personal benefit".

Potapenko and Turõgin are awaiting sentencing on May 8 and could face up to 20 years in prison for conspiracy to commit wire fraud.

Meanwhile, an Indian darknet user was recently sentenced to over 10 years in a US prison. What happened? Read the full story.