Hashflare Owners Arrested Over $575 Million Fraud

Reading Time: 2 minutes
The operators of the cloud mining company Hashflare were arrested in Estonia over the weekend
The pair are accused of using Hashflare to steal funds and then laundering them
Hashflare operated between 2015 and 2019

Crypto fraud may never be the same again following the FTX affair, but it carries on nevertheless, as two Estonian crypto crooks can testify. Sergei Potapenko and Ivan Turõgin were arrested over the weekend on an 18-count indictment for allegedly operating a $575 million cryptocurrency fraud and money laundering conspiracy in involving the company Hashflare, which offered cloud mining contracts between 2015 and 2019 and turned out to be nothing but a ruse to steal money from unwitting customers.

Hashflare Took in $550 Million

Hashflare claimed to have a huge mining farm where people could buy short term contracts and profit from the enterprise remotely, winding down the company in 2018 and blaming the bear market for rising costs. In truth however, they had probably earned enough money, although they still sold contracts into 2019.

As well as operating the fraudulent cloud mining service, Potapenko and Turõgin also caused victims to invest in a virtual currency bank called Polybius Bank. This turned out to be equally as legitimate as Hashflare and never paid out the promised dividends, allowing the pair to pocket $575 million from the two operations, with Hashflare earning more than $550 million of this.

Potapenko and Turõgin are then alleged to have used shell companies to launder the fraud proceeds, as well as purchasing real estate and luxury cars. Potapenko and Turõgin’s mistake may have been involving victims from the U.S., which allowed the FBI to start an investigation.

Pair Will Face Extradition and 20 Years in Prison

Working with Estonian police, the FBI was able to trace the flow of money from the scam and locate the pair, who were both arrested on Sunday after a grand jury returned a verdict that there was enough grounds to charge them with conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering.

Potapenko and Turõgin will now face extradition to the U.S. to stand trial, where each will face a maximum penalty of 20 years in prison.

The post Hashflare Owners Arrested Over $575 Million Fraud appeared first on FullyCrypto.

Related Posts

Gemini gets regulatory greenlight in Italy, Greece amid lending halt

Winklevoss’ Gemini exchange received the latest regulatory approvals days before its lending product Gemini Earn faced major issues. Winklevoss brothers’ cryptocurrency exchange Gemini continues expanding in Europe,…

Bullish news for Polygon: Partnerships, wallets & future outlook – Will MATIC price rise to $5?

The popular Phantom wallet announced support for the rapidly growing number of NFTs, games, and apps powered by Polygon. Polygon has seen a nearly 200 percent jump…

Famous trading bot chooses this ETH altcoin to outperform the market – This is how you profit

The Real Vision Bot is known for outperforming the digital asset market, and its historic performance was recently labeled as “astonishing” by Real Vision founder and macro…

Structural Adjustment: How The IMF And World Bank Repress Poor Countries And Funnel Their Resources To Rich Ones

The IMF and World Bank do not seek to fix poverty, but only to enrich creditor nations. Could Bitcoin create a better global economic system for the…

Report: Nigerian Securities Regulator to Exclude Crypto in its Digital Asset Agenda

According to Lamido Yuguda, the director general of the Nigerian Securities and Exchange Commission, the regulator does not plan on including cryptocurrencies in its digital asset agenda….

Is ApeCoin Treasury Cashing Out? Roughly 4.6 Million APE Sold Overnight

ApeCoin price has appreciated by over 40% since Nov. 18, making traders and investors hopeful of a final recovery. However, recent on-chain data paints a different picture…

Generated by Feedzy