Estonian Court Overturns Extradition Ruling for Crypto Fraud Suspects

According to CryptoPotato, a circuit court in Estonia has overturned a previous ruling that allowed the extradition of two Estonian citizens charged with cryptocurrency fraud and money laundering to the United States. The court found that the Estonian government did not consider certain circumstances before agreeing to extradite Ivan Turogin and Sergei Potapenko, who ran a virtual currency mining business called HashFlare. The Tallinn Circuit Court annulled the extradition because the government did not investigate or verify the condition of the US detention facility. Turogin and Potapenko were arrested in Estonia in November 2022 for allegedly running a fraudulent crypto service that resulted in the loss of $575 million for users. The Department of Justice (DOJ) accused both individuals of making victims purchase equipment mining contracts for HashFlare and urging them to invest in a crypto bank called Polybius, which promised to pay dividends to investors. However, investigations revealed that the mining contracts were fake, and Polybius was not a bank and did not pay any dividends. Instead, the DOJ stated that Turoguin and Potapenko ran a Ponzi scheme defrauding “hundreds of thousands of victims” between 2015 and 2019. Following the arrest of the HashFlare co-founders, the US government sought to extradite the Estonian citizens to the United States. However, the latest development may prevent the handover from happening. The circuit court fined the Estonian government 46,365.30 euros ($50,809.65) and 50,710 euros ($55,531) to cover Turogin’s and Potapenko’s expenses. In addition, Turogin and Potapenko’s families will get reimbursements of 4,080 euros (~$4,500) and 3,000 euros (~$330), respectively. The circuit court’s decision can be appealed by Dec. 11, 2023.