| Defendant | Charges | Proposed Sentence |
|---|---|---|
| Sergei Potapenko | Wire Fraud | 10 years |
| Ivan Turogin | Wire Fraud | 10 years |
What is HashFlare?
HashFlare is a cryptocurrency mining service co-founded by Sergei Potapenko and Ivan Turogin. It has been accused of operating as a Ponzi scheme, misleading investors about their returns.
Why did the co-founders plead guilty?
The co-founders pleaded guilty to conspiracy to commit wire fraud as part of a plea deal, acknowledging the fraudulent nature of their operations. Prosecutors highlighted that the defendants’ claims of no losses were contradicted by evidence.
Frequently Asked Questions
What is the potential sentence for the HashFlare co-founders?
The government is seeking a 10-year prison sentence for both Sergei Potapenko and Ivan Turogin for their roles in the fraud.
How much money did HashFlare return to users?
HashFlare returned approximately $400 million in cryptocurrency to users, yet prosecutors argue this does not negate the fraud committed.
Key Takeaways
- Guilty Plea: The HashFlare co-founders have pleaded guilty to wire fraud.
- Significant Losses: Prosecutors argue that victims suffered real financial harm.
- Sentencing Ahead: A 10-year sentence is being sought by the government.
Conclusion
The HashFlare case highlights significant issues in the cryptocurrency mining sector, as the co-founders face serious consequences for their actions. As the legal proceedings unfold, the impact on victims remains a focal point of discussion.
The two men pleaded guilty to conspiracy to commit wire fraud in February and later received a letter directing them to “self-deport” from the United States.
Two Estonian nationals who co-founded the cryptocurrency mining service HashFlare are scheduled to be sentenced on Thursday after pleading guilty to conspiracy to commit wire fraud as part of a plea deal with prosecutors.
In a Monday filing, US prosecutors pushed back against many of the claims made by lawyers for HashFlare co-founders Sergei Potapenko and Ivan Turogin in their sentencing recommendation.
The two men requested time served, while lawyers representing the US government have asked the judge to sentence them to 10 years in prison, arguing “the harm HashFlare’s victims suffered could not be more real.”
“[…] Defendants argue HashFlare’s victims suffered no loss based in part on [an expert opinion] and in part on meager attempts to discredit their victims’ statements,” said prosecutors. “However […] the expert opinion is based substantially on supposed HashFlare investor earnings – data that Defendants admitted in their plea agreements was fabricated – while Defendants’ own figures substantially support the victims’ narratives they seek to discredit.”
Supplement for the US government’s sentencing recommendation for Sergei Potapenko and Ivan Turogin. Source: US District Court for the Western District of Washington at Seattle
The HashFlare co-founders claimed in previous court filings that users had not suffered any significant losses after they returned $400 million in crypto to users and agreed to forfeit interests in assets frozen by the US government in 2022. Prosecutors said in their Monday filing that these arguments were “wrong” and that HashFlare essentially operated as a “fraud, a Ponzi Scheme.”
Indicted in October 2022, Potapenko and Turogin were arrested and held in Estonia before their extradition to the US in May 2024. Both have been free on bail since July 2024 and pleaded guilty to conspiracy to commit wire fraud in February.
Orders to “self-deport” before sentencing?
During court proceedings, the HashFlare co-founders received letters from the US Department of Homeland Security directing them to “leave the United States” as part of the Trump administration’s push for mass deportations. It’s unclear whether the judge will consider their immigration status at sentencing.
Cointelegraph reached out to Potapenko’s counsel for comment on the sentencing hearing but had not received a response at the time of publication.
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Source: https://en.coinotag.com/hashflare-co-founders-face-sentencing-after-guilty-plea-amid-claims-of-fraud-and-deportation-orders/