Estonian Nationals Extradited to US for $575M Crypto Fraud

Two Estonian nationals have been extradited from Estonia to the U.S. to face charges for their roles in “a massive multi-faceted cryptocurrency Ponzi scheme,” according to an announcement by the U.S. Department of Justice (DOJ). Sergei Potapenko and Ivan Turõgin are accused of operating a $575 million Ponzi scheme involving the fraudulent cryptocurrency mining service Hashflare. They allegedly deceived victims into purchasing contracts for virtual currency mining, but Hashflare mined less than one percent of the promised bitcoin and paid investors with purchased currency. Additionally, they raised $25 million through the fictitious venture Polybius, which never became a virtual currency bank. The pair is accused of laundering the fraud proceeds via shell companies, using the funds to buy real estate and luxury items. They face multiple charges, including conspiracy to commit wire fraud and money laundering, each carrying a possible 20-year prison term. The FBI and Estonian authorities investigated the case.

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