Two men have been arrested by police in Estonia for having allegedly run a $575m cryptocurrency scam involving hundreds of thousands of victims.
The case was jointly investigated by Estonian police and the FBI, with the US requesting to extradite the pair – Estonian nationals Sergei Potapenko and Ivan Turogin.
A statement released by the US Department of Justice says the pair are accused of wire fraud and conspiracy to commit money laundering. These crimes can carry a prison sentence of up to 20 years.
The duo are currently pending extradition to the US following an appearance in court in the Estonian capital Tallinn. They are alleged to have defrauded victims by offering them the opportunity to buy into HashFlare’s cryptocurrency mining operations. Their customers are said to have spent more than half a billion dollars on these HashFlare contracts from 2015 to 2019. However, the operation allegedly overstates its capabilities.
The defendants then used shell companies to launder their proceeds, including buying at least 75 properties and luxury cars.
Oskar Gross of Estonia’s police cyber crime bureau spoke about how the joint investigation had been “long and vast” and had utilised more than 100 staff members, including 15 from the American side.
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