2 Estonians indicted in $600M crypto scheme face Seattle court

SEATTLE - Two Estonians indicted in a massive cryptocurrency Ponzi scheme in 2022 have finally been extradited to Seattle this week to stand trial.

According to the U.S. District Court in Seattle, 39-year-olds Sergei Potapenko and Ivan Turõgin were indicted for conspiracy, wire fraud and conspiracy to commit money laundering, totaling 18 counts in Western Washington. Estonian authorities arrested the two in the capital city of Tallinn on Nov. 20, 2022, and just last week cleared the way for the suspects to be extradited to the U.S.

Potapenko and Turõgin are accused of running a "crypto mining" operation that scammed investors out of more than half a billion dollars between 2015–2019.

In that time period, investors forked over more than $575 million to the pair's business "Hashflare," which purported to be a cryptocurrency mining operation, using computers to generate crypto like Bitcoin for profit. Prosecutors say in reality, Hashflare had roughly less than 1% of the computing power they promised, and most of that money went to buying real estate and luxury cars.

The scam reached victims as far away as Western Washington, according to the indictment.

After Hashflare folded in 2019, the two fell to their other company called "Polybius," which promised to form a bank of virtual currency. According to the indictment, they raised $25 million, which again went to their personal accounts.

Each of the 18 charges is punishable by up to 20 years in prison.