Ivan Turogin and Sergei Potapenko face 18 charges in the United States and long prison terms for allegedly making HashFlare a Ponzi scheme.
Co-founders of the defunct #Bitcoin cloud mining service HashFlare, Ivan Turogin and Sergei Potapenko, are facing renewed efforts for their extradition from Estonia to the United States. Initially stalled by an Estonian appeals court in November, the extradition process has been reinitiated after the Estonian government fulfilled the necessary conditions.
The duo is facing 18 charges in the U.S., including conspiracy, wire fraud, and conspiracy to commit money laundering, with potential prison sentences of up to 20 years each. HashFlare, formerly a prominent cloud miner, is accused of operating as a Ponzi scheme.
Arrested in Estonia in November 2022 following a joint U.S.-Estonian investigation, Turogin and Potapenko successfully challenged their extradition in November. The court ruled that the initial extradition decision didn't adequately consider U.S. detention conditions. They were ordered to receive financial compensation as a result.
However, the Estonian government has now presented evidence assuring that extradition will not disproportionately infringe on the individuals' fundamental rights. This was reported by the Estonian news outlet Postimees.
HashFlare, which amassed $575 million, collapsed in 2019 after facing operational issues since 2018. The U.S. Department of Justice alleges that Turogin and Potapenko misled customers about HashFlare's mining capabilities, lacking the claimed equipment and computing power. The scam reportedly affected "hundreds of thousands" of victims, with the FBI continuing to search for affected parties.
Additionally, the pair is accused of failing to develop a digital bank named Polybius, despite raising $25 million from investors for this purpose.
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