The two founders of the Bitcoin cloud miner HashFlare were arrested in Estonia on suspicion of taking part in a $575 million crypto scam.
HashFlare crypto scam exposed
Sergei Potapenko and Ivan Turogin are accused of wire fraud and conspiring to launder money in an indictment that was recently unsealed in the US District Court in Seattle.
Four other individuals, residing in Estonia, Switzerland, and Belarus, were also charged; however, their identities have not been made public.
The entire mining operation was a part of a “multi-faceted scheme” that “defrauded hundreds of thousands of victims.” according to a statement from the US Department of Justice quoting court documents.
Properties up for seizure
The two are also charged with plotting to launder their “criminal proceeds” through the use of thousands of crypto mining machines, 75 properties, six luxury cars, and cryptocurrency wallets.
According to Seattle US Attorney Nick Brown, US and Estonian authorities are working to seize the defendants’ properties and bank accounts.
“These defendants capitalized on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme,” he said.
According to investigators, several of the victims were in western Washington state.
No information about the men’s legal representation was found in Seattle court records.