HashFlare co-founder admits to $577 million Ponzi scheme, pleads for probation, prosecution seeks 10-year sentence

ChainCatcher news, according to Cointelegraph, the co-founders of the defunct cryptocurrency mining service HashFlare, Sergei Potapenko and Ivan Turõgin, have requested a U.S. court to waive additional imprisonment after admitting to telecom fraud. The two are accused of orchestrating a $577 million Ponzi scheme, resulting in approximately $300 million in losses.

Prosecutors argue that both should be sentenced to 10 years in prison, stating that their crimes are among the largest fraud cases being tried in court. However, Potapenko and Turõgin contend that they have cooperated with the investigation and have served 16 months in prison in Estonia, and that their sentences should not be excessively long.

The two were arrested in Estonia in November 2022 and are set to be extradited to the U.S. in May 2024. They are currently out on bail, with a sentencing hearing scheduled for August 14.