HashFlare Founders’ Extradition to the US
Sergei Potapenko and Ivan Turogin, the co-founders of the now-closed crypto cloud mining platform HashFlare, are set to be extradited to the United States from Estonia after the Estonian government met the requirements for their extradition.
The pair have been charged with money laundering and wire fraud in the US. If found guilty, Potapenko and Turogin could each face up to 20 years in federal prison.
HashFlare, once a top cloud mining platform, was found to be a Ponzi Scheme three years ago. The Estonian and US law enforcement arrested the founders of the company in Estonia at the end of 2022. Last September, the Estonian government gave the green light to the extradition of Potapenko and Turogin, but the two managed to appeal the decision the following month successfully.
At the time, an Estonian court said that the government had failed to take into consideration the conditions in American detention facilities when approving the extradition. Now, Estonian authorities have gathered evidence on those facilities that show fundamental human rights won’t be violated after Potapenko and Turogin get extradited.
HashFlare Collected Millions From Investors Before Shutting Down
Before closing shop in 2019, HashFlare had collected over $550 from investors, who in 2018 started claiming that the cloud mining platform was no longer distributing profits. Per the US Justice Department, HashFlare offered contracts to customers for a fee in exchange for mining rewards earned from the firm’s mining operations.
Justice Department Says HashFlare Didn’t Own Mining Equipment
However, it was discovered that HashFlare never had any mining equipment or facility. So, where did the company’s founders get the mining rewards? It is alleged that Potapenko and Turogin used to buy Bitcoin from exchanges and distribute it as rewards to investors.
The Justice Department says HashFlare scammed thousands of Americans. Now, the United States Federal Bureau of Investigation has asked victims to come forward and file a report on the FBI’s official website.
Besides scamming cloud mining investors, Potapenko and Turogin are accused of collecting $20 million from various venture capitalists to develop a digital bank dubbed Polybius, which never materialized.
