The founders of HashFlare, a crypto mining firm behind a $577 million Ponzi scheme, have escaped extra jail time after admitting to their roles within the scheme.
Sergei Potapenko and Ivan Turõgin have been in custody for 16 months, and Seattle Federal Court docket Choose Robert Lasnik gave them time served of their sentencing hearings on Tuesday.
He additionally ordered every to pay a $25,000 high quality and full 360 hours of neighborhood service whereas on supervised launch, which is anticipated to be served of their native Estonia.
The Division of Justice said on Tuesday that it’s contemplating whether or not it ought to attraction the sentence as prosecutors requested for the duo to be imprisoned for 10 years, whereas Potapenko and Turõgin had asked for time served.
The pair have been arrested in Estonia in November 2022 and spent 16 months in custody earlier than being extradited to the US in Could 2024, the place they pleaded guilty to conspiracy to commit wire fraud.
Largest fraud case within the court docket’s historical past
Seattle prosecutors stated it was the most important fraud case that they had ever tried, an argument they relied on closely in pushing for the pair to get 10 years in jail.
Choose Lasnik appeared to search out benefit in Potapenko and Turõgin’s arguments that the 440,000 prospects they have been accused of ripping off didn’t endure vital losses as they forfeited greater than $400 million value of belongings as a part of their plea deal in February.
The HashFlare founders additionally famous that 390,000 of these prospects who spent $487 million on HashFlare mining contracts have since withdrawn $2.3 billion.
HashFlare a “basic Ponzi,” prosecutors stated
Prosecutors had argued that between 2015 and 2019, HashFlare’s gross sales totaled over $577 million, posting faux dashboards that falsely reported the agency’s mining capability and the returns buyers have been making from the scheme. It paid out existing members with funds from newer prospects.
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“These defendants have been working a basic Ponzi scheme, involving a glitzy asset: a mirage of cryptocurrency mining,” Performing US Legal professional Teal Luthy Miller stated within the DOJ’s assertion.
“Identical to a basic Ponzi, they diverted tens of millions of {dollars} to their very own profit, buying their very own Bitcoin, actual property, luxurious vehicles, costly jewellery, and greater than a dozen journeys on chartered personal jets.”
Pair have been informed to “self-deport” earlier than sentencing
Regardless of a court docket ordering Potapenko and Turõgin to remain within the US, the pair stated in April that they acquired a letter from the Department of Homeland Security directing them to “deport instantly” — inflicting appreciable confusion over their futures, their legal professionals stated on the time.
The HashFlare founders had expressed their wishes to return home on multiple occasions.
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