365Crypto
Two Estonian nationals, Sergei Potapenko and Ivan Turõgin, have admitted to running a massive cryptocurrency Ponzi scheme through their company, HashFlare. The fraud spanned from 2015 to 2019, scamming hundreds of thousands of victims worldwide.
Fake Mining Profits and Lavish Spending
HashFlare falsely claimed to mine cryptocurrency, selling contracts that promised customers a share of profits. However, the company lacked the necessary computing power, and the supposed earnings shown on customer dashboards were fabricated. The scheme generated $577 million, which the founders spent on luxury cars, real estate, and crypto investments.
$400M Forfeited for Victim Compensation
As part of their plea deal, Potapenko and Turõgin agreed to forfeit over $400 million, which will be used to compensate victims. Details on the payout process will be announced later.
Sentencing and Legal Action
Both pleaded guilty to conspiracy to commit wire fraud, facing up to 20 years in prison. Sentencing is scheduled for May 8. The U.S. Justice Department worked with Estonian authorities to investigate and extradite the defendants.
