Estonian government approves HashFlare boss’s extradition request

The Estonian government has approved the extradition of Ivan Turogin and Sergei Potapenko, co-founders of defunct Bitcoin mining company HashFlare, to the United States to face charges of criminal activity such as cryptocurrency fraud.

This is the second time the government of the north-eastern European country has agreed to hand over cryptocurrency traders to the U.S. after a court intervened on Nov. 29 to cancel the initial approval, according to local media reports.Bitcoin Miner

HashFlare Duo Accused of Participating in $575 Million Ponzi Scheme

Founded in 2015, HashFlare is a bitcoin mining company that allows customers to rent a portion of its mining operations, thereby granting them ownership of all cryptocurrencies generated by their respective portions of the company’s arithmetic.

Between 2015 and 2019, Potapenko and Turogin described their cryptocurrency company as a legitimate business, attracting more than $550 million in purchases of “HashFlare mining contracts”. In fact, the companies operated a website that allowed investors to view the number of tokens generated by their respective mining contracts.ETC Miner

However, according to an investigation by the U.S. Department of Justice, HashFlare was allegedly a Ponzi scheme with little to no mining operations, as customers faced challenges in withdrawing mined tokens from the company. In fact, successful withdrawal efforts resulted in different assets than the tokens registered in the mining contracts.

The U.S. Department of Justice announced that Potapenko and Turogin are suspected of committing large-scale fraud and laundering funds generated from the sale of mining contracts through the purchase of land and vehicles, as well as by storing some of their collections in crypto wallets and legal bank accounts.

In addition to HashFlare, the two Estonian citizens are accused of marketing Polybius, a non-existent cryptocurrency bank, which they used to defraud unsuspecting investors out of $25 million.

Estonian Defendants Face 18 Charges in the U.S.

In November 2022, Estonian police and the U.S. Federal Bureau of Investigation (FBI) conducted a joint operation that resulted in the arrest of Sergei Potapenko and Ivan Turogin.

On September 7, the Estonian government approved a request to extradite the two suspects to the United States. However, the Tallinn Circuit Court blocked the order, citing the government’s failure to investigate the suspects’ conditions of detention in the United States. After this condition was met, the Estonian Government again authorized the transfer of the Hashflare duo to the United States.

Potapenko and Turogin are charged with 16 counts of 18 counts of wire fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. If convicted, the Estonian businessmen could be sentenced to lengthy prison terms, as each offense carries a maximum penalty of 20 years in prison.