TechFlow news — According to a press release from the U.S. Department of Justice (DOJ), Estonian nationals Sergei Potapenko and Ivan Turõgin made their initial court appearance yesterday on charges related to an alleged cryptocurrency fraud case.
The Western District of Washington previously charged them with operating HashFlare, a fraudulent cryptocurrency mining service, between 2015 and 2019, deceiving hundreds of thousands of victims into investing over $550 million without delivering the promised mining capacity. In another scheme launched in May 2017, Potapenko and Turõgin raised at least $25 million through investments in a company called Polybius, which they claimed would establish a virtual currency bank. Despite promises of profit-sharing, the bank was never created, and most of the funds were allegedly transferred into accounts controlled by the defendants.
The DOJ further alleges that the two laundered money through shell companies, fake contracts, and invoices, using the proceeds to purchase 75 real estate properties, six luxury vehicles, cryptocurrency wallets, and thousands of mining rigs. They face charges of conspiracy to commit wire fraud, 16 counts of wire fraud, and conspiracy to commit money laundering, each carrying a maximum penalty of 20 years in prison.
