According to Cointelegraph, the co-founders of the cryptocurrency mining service HashFlare have agreed to plead guilty to a single count of conspiracy to commit wire fraud. This decision comes as part of a plea agreement with U.S. authorities. During hearings on February 12 in the U.S. District Court for the Western District of Washington, Sergei Potapenko and Ivan Turogin admitted guilt to one felony charge out of the 18 they faced from U.S. prosecutors. The Estonian nationals were accused of operating HashFlare as a Ponzi scheme, defrauding users of more than $550 million between 2015 and 2019. Additionally, they raised $25 million from investors in 2017 with promises to establish a digital bank named Polybius, which was never created.
Reed Smith partner and defense counsel Mark Bini, speaking to Cointelegraph after the hearings, stated that both defendants have "agreed to forfeit their interests in assets that the Government froze in 2022" and will provide assistance to ensure "zero financial harm to anyone." According to Bini, Potapenko, Turogin, and HashFlare returned $350 million in cryptocurrency payments to users between 2015 and 2022. HashFlare ceased operations in 2019, and Estonian authorities arrested Potapenko and Turogin in 2022 as part of the 18-count indictment. Following legal challenges, they were extradited to the United States in May 2024. Both have been free on bail since July 2024 but could face up to 20 years in prison each after a sentencing hearing scheduled for May 8.
This case remains under development, and further updates will be provided as new information becomes available.
Miyuki
