HashFlare Founders Risk Extradition to U.S. for Alleged $575M Ponzi Scheme

Estonian entrepreneurs behind the HashFlare Ponzi scheme find themselves back on track to face the consequences of their scam.

The Estonian government is finally extraditing the founders behind HashFlare.

HashFlare founders are on track to face a multitude of charges on US soil.

An appeals court previously spared the Estonian entrepreneurs, but luck didn’t favor them this time.

Ivan Turogin and Sergei Potapenko, the masterminds behind the defunct Bitcoin cloud miner HashFlare, are again slated for extradition from Estonia. Previously, legal proceedings faced a setback when an Estonian court intervened and annulled the government’s decision.

However, this time, the Estonian government comes prepared with evidence, and the two entrepreneurs find themselves back on track to face the consequences of their multi-million dollar scam on US soil.

HashFlare Founders Face Extradition Despite Intervention from Courts

Estonia has finally approved the extradition of the masterminds behind the $575 million HashFlare Ponzi scheme, as reported by local news outlet Postimees.

Initially approved in September 2023, the extradition was halted when the Tallinn Circuit Court intervened in November 2023 following a successful appeal from Turogin and Potapenko. Instead of sending the founders to the US, the appeals court criticized the Estonian government’s decision, citing an inadequate investigation into essential circumstances, and ordered monetary compensation for the founders.

However, armed with evidence regarding US detention conditions, the Estonian government has now met the necessary conditions to proceed with the extradition.

HashFlare, which collected $575 million before its collapse in 2019, has left founders Turogin and Potapenko facing charges including 18 counts of conspiracy, wire fraud, and conspiracy to commit money laundering in the US. If convicted, the duo could each face up to 20 years in prison. Arrested in Estonia in 2022 following a joint investigation by US and Estonian law enforcement, the founders find themselves entangled in the complex web of legal proceedings spanning multiple jurisdictions.

On the Flipside
Turogin and Potapenko also face allegations of collecting $25 million from investors to create a digital bank named Polybius.

The US Department of Justice contends that HashFlare falsely represented its capabilities, asserting that the company lacked the claimed equipment and possessed less than 1% of the computing power it professed to have.

Why This Matters
The charges against Sergei Potapenko and Ivan Turogin underscore the government’s commitment to regulating the crypto industry and clamping down on bad actors to safeguard investors and users.

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