The U.S. Department of Justice (DOJ) announced that two Estonian nationals, Sergei Potapenko and Ivan Turõgin, have been extradited from Estonia to the U.S. to face charges related to a large-scale cryptocurrency Ponzi scheme. The scheme, which involved the fraudulent cryptocurrency mining service Hashflare, is said to have reached a staggering $575 million. Potapenko and Turõgin allegedly deceived victims by offering contracts for virtual currency mining, but only mined less than one percent of the promised bitcoin, using purchased currency to pay investors instead.
In addition to their involvement with Hashflare, the accused duo also raised $25 million through a fictional project called Polybius, which was intended to be a virtual currency bank but never materialized. The funds obtained from the fraud were allegedly laundered through shell companies, with a portion being used to purchase real estate and luxury items.
Potapenko and Turõgin now face several charges, including conspiracy to commit wire fraud and money laundering, each carrying a maximum sentence of 20 years in prison. The case was investigated by the FBI in collaboration with Estonian authorities.
