HashFlare Founders Plead Guilty To Running $577 Million Crypto Ponzi Scheme

Two Estonian founders of a company called HashFlare, Sergei Potapenko and Ivan Turgin, admitted guilt in a crypto Ponzi scheme that defrauded victims of over $577 million between 2015 and 2019. They falsely claimed to sell contracts for a share of crypto mining profits, but HashFlare lacked the necessary computing power. A dashboard displaying supposed mining profits showed fake data, creating an illusion of returns. The founders used the money to buy luxury items like real estate and vehicles, and to maintain crypto accounts. They have agreed to forfeit over $400 million in assets, which will be used to compensate victims through a process to be detailed later. They each pleaded guilty to one count of conspiracy to commit wire fraud, with a maximum sentence of 20 years, and their sentencing is scheduled for May 8th. Estonian authorities assisted in their extradition.