Tallinn, Estonia – February 19, 2025 – Two Estonian crypto fraudsters admit to stealing $577M in a massive Bitcoin mining Ponzi scheme. Hundreds of thousands lost everything.
The cryptocurrency world is reeling as Sergei Potapenko and Ivan Turõgin, the masterminds behind the fraudulent HashFlare mining scheme, have pleaded guilty to orchestrating a $577 million Ponzi scheme.
The Estonian nationals, once hailed as crypto pioneers, duped investors worldwide, luring them in with false promises of lucrative Bitcoin mining profits.
Between 2015 and 2019, Potapenko and Turõgin convinced hundreds of thousands of victims to invest in HashFlare, a cloud-based cryptocurrency mining service. But instead of real mining, they fabricated earnings, displaying fake profits on their platform while pocketing investors’ funds.
The money was funneled into luxury real estate, cars, and hidden offshore accounts. Chad Yarbrough, FBI Assistant Director said:
This was a sophisticated and deliberate deception. They preyed on the crypto boom and destroyed lives in the process.
The United States, Estonia, and multiple global agencies worked together to take down the duo. With over $400 million in assets seized, authorities plan to return funds to defrauded investors.
Meanwhile, both criminals face up to 20 years in prison, with sentencing set for May 8, 2025. Mike Herrington, FBI Special Agent warned:
Cryptocurrency scams are the new financial plague. If it sounds too good to be true, it probably is.
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