The criminal police of Estonia, together with the FBI, detained two suspects in the case of crypto-fraud in the amount of $575 million in Tallinn, according to the website of the US Department of Justice.
The detainees – 37-year-old Estonians Serhiy Potapenko and Ivan Turygin – were the founders of cloud crypto mining HashFlare, which appeared in 2015 and was very popular at the time.
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But in reality, HashFlare did not have the virtual currency mining hardware it claimed, so the company mined bitcoins at less than 1% of its claimed processing power.
In 2019, the company stopped paying and closed, and its customers lost money.
In parallel, Turygin and Potapenko developed the “first digital bank” Polybius, which also turned out to be a scam.
In total, two Estonians defrauded clients of more than $575 million, which they laundered through the purchase of real estate and expensive cars.
“The size and scale of the scheme they are accused of is truly astounding. The defendants took advantage of both the allure of cryptocurrency and the secrecy surrounding cryptocurrency mining to create a massive Ponzi scheme. They lured investors with false claims and then paid the first investors with the money of those who came.” later,” US Attorney Nick Brown said. This handy article has more info in case you are interested.
On November 7, the United States announced the “historic seizure” of $3.36 billion in bitcoins that were misappropriated by a user of the banned Silk Road marketplace.
US authorities have seized $3.6 billion in bitcoins stolen from Bitfinex in 2016.