Volkswacht Bodensee - Estonians plead guilty to US charges in $577 mn crypto scheme

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Estonians plead guilty to US charges in $577 mn crypto scheme / Photo: © AFP/File

Estonians plead guilty to US charges in $577 mn crypto scheme

ECONOMY 13.02.2025

Two Estonian nationals have pleaded guilty to defrauding hundreds of thousands of people around the world in a $577 million cryptocurrency Ponzi scheme, the Justice Department said Thursday.

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Sergei Potapenko and Ivan Turogin, both age 40, were extradited from Estonia to the United States last year to face charges of conspiracy to commit wire fraud.

As part of their guilty pleas, the two agreed to forfeit assets valued at more than $400 million, the Justice Department said in a statement.

Sentencing by a US district court in Seattle, Washington was set for May 8. They face a maximum penalty of 20 years in prison.

Potapenko and Turogin were arrested in 2022 in a joint operation by Estonian police and the US Federal Bureau of Investigation.

Estonia's supreme court, after a nearly two-year legal battle, agreed last year to send the pair to the United States.

According to court documents, Potapenko and Turogin sold contracts entitling customers to a share of the digital assets mined by HashFlare, their cryptocurrency mining service.

HashFlare's sales totaled more than $577 million between 2015 and 2019 but the company did not actually have the computing capacity needed to perform the vast crypto mining it purported to perform.

A web-based dashboard alleging to show mining profits displayed falsified data and Potapenko and Turogin were unable to pay investors when they asked to withdraw their mining proceeds.

S.Spengler--VB

Volkswacht Bodensee - Estonians plead guilty to US charges in $577 mn crypto scheme

Estonians plead guilty to US charges in $577 mn crypto scheme

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