Two Estonian citizens arrested in $575 mil cryptocurrency fraud and money laundering schemes
Published by Ethan on Fri, Nov 27, 2020 | Tagged Cryptocurrency, Fraud | 1 Comments

The two Estonians, both 37, were allegedly selling mining contracts to hundreds of thousands of investors all around the world. They were arrested in Estonia on November 20.

Sergei Potapenko and Ivan Turõgin, apparently convinced people to invest in a virtual currency bank called Polybius Bank and a cryptocurrency mining service called HashFlare.

HashFlare according to Twitter is cloud-mining service, they closed its operation in 2019. The website for Polybius Bank, on the other hand, still seems to be somewhat operational, but with last blog post made on November 5 2022, and their clients claim that promised dividends were never paid out.

A Ponzi scheme; they enticed investors with false representations and then paid off early investors with money from later investor,
said U.S. Attorney Nick Brown.

HashFlare allegedly did not have the virtual currency mining equipment it claimed to have. In fact, according to the indictment, HashFlare's equipment performed Bitcoin mining at a rate of less than one percent of the computing power it purported to have. Investors were unable to withdraw their mining proceeds, and if the pressure got too high, the defendants paid the investors using currency purchased on the open market, unrelated to what they had mined.

Polybius was in theory running the same plot; the defendants are said to have offered investments in the bank, which would later pay out dividends from its profits. It never took place, and Polybius apparently never became a functioning bank.

The defendants allegedly used shell companies to launder the fraud proceeds and to purchase real estate and luxury cars.

They were charged with conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering. Each of these crimes is punishable by up to 20 years in prison. The defendants are now being held pending extradition to the U.S.

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Wed, Apr 19, 2023

big money no ballsacks

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