Two Estonians Plead Guilty to $577M Crypto Ponzi Scheme, May Face 20 Years in Prison
Two Estonian nationals pleaded guilty to running a
large-scale cryptocurrency Ponzi scheme. The scheme defrauded hundreds of
thousands of people worldwide, including in the United States. The defendants
agreed to forfeit more than $400 million in assets obtained through the fraud,
the DOJ reported.
HashFlare Founders Admit to Crypto Fraud
Sergei Potapenko and Ivan Turõgin, both 40, admitted to
misleading customers through their company, HashFlare. They sold contracts
promising customers a share of cryptocurrency mined by HashFlare. However,
court documents state that the company lacked the computing power needed for
the mining it claimed to perform.
Between 2015 and 2019, HashFlare generated more than $577
million in sales. Customers used a web-based dashboard to track supposed mining
profits, but the data was falsified. The defendants used the proceeds to buy
real estate, luxury vehicles, and cryptocurrency investments.
Co-founders of HashFlare, Sergei Potapenko and Ivan Turogin, plead guilty to wire fraud, defrauding users of $550M. They face sentencing after returning $350M in crypto. Read the full article ⤵️ https://t.co/sjA9y9E9YO
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Earlier, two
individuals were charged by the US government for operating a
multi-billion-dollar money laundering scheme. Law enforcement agencies, with
international cooperation, seized websites linked to illegal cryptocurrency
exchanges, as reported by Finance Magnates.
The operation disrupted three exchanges used to launder
funds, primarily for ransomware groups, darknet drug traffickers, and other
criminals. The individuals, of Russian nationality, allegedly facilitated
payments for stolen credit card data, ransomware profits, and fraud.
Defendants Forfeit $400M to Compensate Victims
As part of their guilty pleas, Potapenko and Turõgin agreed
to forfeit assets worth more than $400 million. These funds will be used for a
remission process to compensate victims. Authorities will announce details of
this process later.
Each defendant pleaded guilty to one count of conspiracy to
commit wire fraud. They face up to 20 years in prison and will be sentenced on
May 8. A federal judge will determine their sentences based on US Sentencing
Guidelines and other factors.
The Justice Department acknowledged assistance from the
Estonian Police and Border Guard’s Cybercrime Bureau. The Estonian Prosecutor
General and Ministry of Justice and Digital Affairs supported the extradition
process. The Justice Department’s Office of International Affairs also assisted
with the investigation.
This article was written by Tareq Sikder at www.financemagnates.com.