US court hands down probationary sentence to Estonian crypto businessmen

TALLINN - A court in Seattle has sentenced Estonian crypto entrepreneurs Ivan Turõgin and Sergei Potapenko to three years of probation, 120 hours of community service, and a 25,000 US dollar fine each, Eesti Ekspress reported.

The men were released in courtroom and are allowed to return to Estonia.

Postimees reported in February that Turõgin, 40, and Potapenko, 40, had pleaded guilty to the HashFlare fraud and surrendered over 400 million dollars to the US government.

According to the charges, Potapenko and Turõgin sold clients contracts that gave them the right to receive a share of cryptocurrency allegedly mined through their cryptocurrency mining service, HashFlare.

Between 2015 and 2019, HashFlare earned over 577 million dollars from selling these contracts, but the company did not actually have sufficient computing power to carry out most of the claimed cryptocurrency mining. The HashFlare online dashboard, which was supposed to show clients their mining revenues, in fact displayed falsified data.

Potapenko and Turõgin used the money obtained through the fraud to purchase real estate and luxury cars, as well as to manage investment and cryptocurrency accounts, Postimees wrote in February.

The men were arrested as suspects in November 2022.

The US justice system plans to use the 400 million dollars confiscated from the men to compensate victims for the damage caused by the crime.

Potapenko and Turõgin attempted to prevent their extradition to the United States, and legal proceedings over their extradition lasted a long time. After the conclusion of the legal battles, Estonia extradited the men to the US at the end of May 2024.