Estonia to extradite duo accused of $600M crypto fraud to US

25 January 2024

in Mining

Reading Time: 2 mins read

Crypto businessmen Ivan Turogin and Sergei Potapenko are set to be extradited to the US to face charges of fraud for allegedly running a $575 million Ponzi scheme called HashFlare.

The Estonian government cleared the duo for extradition on Thursday, after a previous attempt was blocked by the Tallinn Circuit Court in November. Lawyers for the businessmen successfully argued that the government hadn’t considered the “conditions of detention in the United States” that would infringe on their human rights, and that there were procedural irregularities.

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Now, local news Potimees reports that the Ministry of Justice has gathered enough evidence to conclude that extradition conditions have been satisfied.

[crypto-donation-box]

Turogin and Potapenko were arrested in November 2022 in Tallinn. According to the US Attorney’s Office in the Western District of Washington, the businessmen defrauded “hundreds of thousands” through their crypto mining company. The pair are also accused of money laundering. Proceeds were allegedly used to buy real estate and luxury cars.

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“HashFlare allegedly did not have the virtual currency mining equipment it claimed to have,” the US Attorney’s Office stated. “In fact, according to the indictment, HashFlare’s equipment performed Bitcoin mining at a rate of less than one percent of the computing power it purported to have.

“When investors asked to withdraw their mining proceeds, the defendants were not able to pay with the mined currency as promised. Instead, the defendants either resisted making the payments, or paid off the investors using virtual currency the defendants had purchased on the open market—not currency they had mined.”

Turogin and Potapenko will now be extradited to the US, where they face 18 charges of fraud and money laundering.

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