Two co-founders of the crypto mining service HashFlare, Sergei Potapenko and Ivan Turogin, have agreed to plead responsible to conspiracy to commit wire fraud in reference to a large fraud that scammed customers of over $550 million. The duo entered their responsible plea on February 12 within the US District Courtroom in Washington. They have been going through 18 expenses from US prosecutors, and as a part of a plea deal, they admitted to 1 felony rely.
HashFlare Co-founders Plead Responsible
Potapenko and Turogin, each Estonian nationals, operated HashFlare, a platform that misled customers concerning the profitability and capabilities of its mining operations between 2015 and 2019. Along with defrauding customers, the 2 additionally raised $25 million from traders in 2017, promising to create a digital financial institution referred to as Polybius, which finally by no means got here to kind.
Mark Bini, the protection lawyer for the co-founders, confirmed that each defendants have agreed to forfeit belongings frozen by the US authorities in 2022. They will even help in guaranteeing that there isn’t any additional monetary hurt to the victims. Potapenko and Turogin, together with HashFlare, returned $350 million in cryptocurrency funds to customers between 2015 and 2022.
HashFlare closed down its operations in 2019, however Potapenko and Turogin have been arrested by Estonian authorities in 2022 underneath the 18-count indictment. Each Potapenko and Turogin have been extradited to the US in Might 2024. Though each co-founders have been launched on bail since July 2024, they face the potential for as much as 20 years in jail when they’re sentenced on Might 8, 2025.
The indictment had claimed that HashFlare misrepresented its mining operations, claiming a lot greater output than was truly occurring. In response to the preliminary expenses, the platform’s mining capabilities have been solely working at about 1% of what the founders had led prospects to imagine. Turogin’s lawyer, Andrey Spektor, argued that no buyer was financially harmed by the rip-off and that whereas HashFlare did mine cryptocurrency, it did so at far decrease charges than it had promised.
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