Estonian Nationals Plead Guilty in $577 Million Crypto Ponzi Scheme

Two Estonian nationals, Sergei Potapenko and Ivan Turõgin, pleaded guilty to running a $577 million cryptocurrency Ponzi scheme that defrauded hundreds of thousands of investors globally, including in the U.S. They sold contracts for cryptocurrency mining through their company HashFlare, which falsely claimed to have the necessary computing power to generate profits. Instead, the company generated over $577 million in sales from 2015 to 2019, while the data presented to customers was manipulated to create an illusion of profitability. As part of their plea agreement, the defendants will forfeit assets valued at more than $400 million, which will be used to compensate victims. Both face a maximum prison sentence of 20 years, with sentencing scheduled for May 8. The investigation involved international cooperation, notably with the Estonian police and the FBI.