HashFlare Founders Arrested in 'Astonishing' $575M Crypto Fraud Scheme

HashFlare founders have been indicted for their alleged involvement in crypto fraud and money laundering conspiracy.
New
The two founders of the now defunct Bitcoin cloud miner HashFlare have been arrested in Estonia for their alleged involvement in a $575 million crypto fraud plot.

HashFlare was a cloud mining company established in 2015 that was supposed to allow customers to rent the company's hashing power to mine cryptocurrencies and get a matching share of its profits.
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The company was considered one of the leading names in the industry at the time, but shut down much of its mining operations in July 2018.

However, according to a statement by the United States Department of Justice citing court documents, the entire mining operation, led by founders Sergei Potapenko and Ivan Turõgin, was part of a "multiple plan facets" which "defrauded hundreds of thousands of victims."

These included convincing victims to enter into "fraudulent equipment rental contracts" via HashFlare and persuading other victims to invest in a fake virtual currency bank called Polybius Bank.
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The couple are also accused of conspiring to launder their "criminal proceeds" via 75 properties, six luxury vehicles, cryptocurrency wallets and thousands of cryptocurrency mining machines.
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U.S. Attorney Nick Brown for the Western District of Washington called the scale and scope of the alleged scheme “truly staggering.”

"These defendants capitalized on both the lure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit a massive Ponzi scheme," he said.< /p>
The founders of HashFlare have been charged with conspiracy to commit wire fraud, 16 counts of wire fraud and one count of conspiracy to launder money using shell companies and invoices and fraudulent contracts, and could face up to 20 years in prison if convicted.

Two Estonian citizens arrested in connection with $575 million cryptocurrency fraud and money laundering schemehttps://t.co/PLdyf6JSEC
— Criminal Division (@DOJCrimDiv)

Crypto Nov 22, 2022 0 54 Add to Reading List

HashFlare Founders Arrested in 'Astonishing' $575M Crypto Fraud Scheme

HashFlare founders have been indicted for their alleged involvement in crypto fraud and money laundering conspiracy.

HashFlare founders arrested in 'astounding' $575M crypto fraud scheme

New

The two founders of the now defunct Bitcoin cloud miner HashFlare have been arrested in Estonia for their alleged involvement in a $575 million crypto fraud plot.

HashFlare was a cloud mining company established in 2015 that was supposed to allow customers to rent the company's hashing power to mine cryptocurrencies and get a matching share of its profits.

The company was considered one of the leading names in the industry at the time, but shut down much of its mining operations in July 2018.

However, according to a statement by the United States Department of Justice citing court documents, the entire mining operation, led by founders Sergei Potapenko and Ivan Turõgin, was part of a "multiple plan facets" which "defrauded hundreds of thousands of victims."

These included convincing victims to enter into "fraudulent equipment rental contracts" via HashFlare and persuading other victims to invest in a fake virtual currency bank called Polybius Bank.

The couple are also accused of conspiring to launder their "criminal proceeds" via 75 properties, six luxury vehicles, cryptocurrency wallets and thousands of cryptocurrency mining machines.

U.S. Attorney Nick Brown for the Western District of Washington called the scale and scope of the alleged scheme “truly staggering.”

"These defendants capitalized on both the lure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit a massive Ponzi scheme," he said.< /p>

The founders of HashFlare have been charged with conspiracy to commit wire fraud, 16 counts of wire fraud and one count of conspiracy to launder money using shell companies and invoices and fraudulent contracts, and could face up to 20 years in prison if convicted.

Two Estonian citizens arrested in connection with $575 million cryptocurrency fraud and money laundering schemehttps://t.co/PLdyf6JSEC

— Criminal Division (@DOJCrimDiv)