SEATTLE – Two Estonians have been arrested and charged for a massive $575 million cryptocurrency scam that reached as far as Western Washington.
According to the U.S. District Court in Seattle, 37-year-olds Sergei Potapenko and Ivan Turõgin both face an 18-count indictment for conspiracy, wire fraud and conspiracy to commit money laundering. Both men were arrested in Tallinn, Estonia on Nov. 20, and are currently pending extradition to the U.S.
U.S. Attorney Nick Brown alleges the two ran a “crypto mining” operation that scammed investors out of more than half a billion dollars between 2015–2019.
“The size and scope of the alleged scheme is truly astounding. These defendants capitalized on both the allure of cryptocurrency, and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme,” said Brown. “They lured investors with false representations and then paid early investors off with money from those who invested later. They tried to hide their ill-gotten gain in Estonian properties, luxury cars, and bank accounts and virtual currency wallets around the world. U.S. and Estonian authorities are working to seize and restrain these assets and take the profit out of these crimes.”
According to the indictment, Potapenko and Turõgin operated a crypto mining business called HashFlare. Crypto mining is the process of using computers to generate cryptocurrency like Bitcoin.
The two offered contracts where customers would pay a fee to rent a…
