Basri Caneri 
Two Estonian nationals on trial in the US have confessed to raising $577 million in a fake crypto mining scam. Sergei Potapenko and Ivan Turõgin made a huge worldwide haul, defrauding thousands of investors with a fake mining service called HashFlare.
Fake Mining and Investor Fraud
Potapenko and Turõgin sold mining contracts on HashFlare between 2015 and 2019, promising investors a share of Bitcoin mining. However, in reality, they did not have enough computing power to mine. The web-based dashboard presented to investors was full of fake data and only pretended to generate profits.
Funds raised in the process were used for personal expenses and luxury living. According to the U.S. Department of Justice, the defendants deceived investors with aesthetically designed false profit statements.
Penalties and Trial Process
- Each defendant could face up to 20 years in prison.
- The unlawfully obtained assets will be used to compensate the victims.
- The final sentencing will take place on May 8, 2025.
International Cooperation and FBI Investigation
The investigation was led by the FBI’s Seattle Bureau and cooperated with the US Department of Justice and the Estonian Police and Border Guard Cybercrime Bureau. The Estonian Prosecutor General’s Office and the Ministry of Digital Affairs also supported the extradition of the defendants.
The defendants were arrested in Estonia in November 2022 and extradited to the US in May 2024. Authorities stated that the fraud case is one of the largest international crimes in the crypto sector.
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