HashFlare Co-Founder Pleads Guilty, Admits to Scam Involving Over $550 Million

BlockBeats News, February 13th. According to Cointelegraph, Sergei Potapenko and Ivan Turogin, co-founders of the cryptocurrency mining service HashFlare, pleaded guilty in the U.S., admitting to conspiring to commit telecommunication fraud. As part of the plea agreement, they agreed to forfeit all digital assets frozen by the U.S. The HashFlare operation, run by the two individuals, defrauded users of over $550 million between 2015 and 2019. In 2017, they raised $25 million from investors through a never-established fake digital bank called the Polybius project.

Both individuals were arrested in Estonia in 2022, extradited to the U.S. in May 2024, originally facing 18 charges, and eventually pleaded guilty to one. The sentencing hearing is scheduled for May 8th, with a maximum possible sentence of 20 years in prison.