The co-founders of hashflare, a Crypto Mining Ponzi scheme that stole $ 577 million from hundreds of thousands of investors around the world, both declared guilty Wednesday as a conspiracy to commit wire fraud.
Sergei Potapenko and Ivan Turõgin, both 40, were arrested in their original Estonia in November 2022 and handed over to the United States on an 18-count indictment. Yesterday, both men pleaded guilty to a counting each of the conspiracy to commit wire fraud that has a maximum sentence of 20 years in prison.
Between 2015 and 2019, Potapenko and Turõgin Hashflares convinced investors to rent a percentage of the scheme’s crypto mining in return for a percentage of the cryptocurrency produced hashflare. But according to court documents, Hashflare had only a small fraction of the mining that it is alleged to have – less than 1% of the computer power Potapeno and Turõgin had sold. When investors tried to claim their revenue, prosecutors say the two men either opposed to make payments by making excuses or paid them back with crypto purchased on the open market.
Read more: Two esters accused of running a variety of crypto fraud total $ 575 million.
Potapenko and Turõgin’s lawyers say none of Hashflares investors suffered financial damage and told Coindesk that men’s only crime was around the size of Hashflares mining.
“Ivan and Sergei ran successful businesses, provided real services, employed almost 100 esters and performed charitable work in Estonia. As Ivan admitted [Wednesday]One of his and Sergei’s companies promised to my crypto and actually did my crypto, but not as much as it had promised; Instead, it sometimes repaid customers with crypto it had purchased in the open market, ”said Andrey Spector, partner at Norton Rose Fulbright US LLP and adviser to Turogin.
“However, it is important as we will show by penalties that no customer has suffered any harm. Ivan and Sergei look forward to returning to Estonia and resuming their lives. “
According to court documents, men used their victim’s money to earn dozens of real estate investments and buy luxury cars. As part of the plea of an agreement, Potapenko and Turõgin accepted for lost assets that are valued over $ 400 million, which will be used to pay back investors.
Potapenko and Turõgin will be sentenced to a Seattle Court on May 8th.
