Suspects of $575 million crypto-fraud detained in Estonia
Two men are accused of offering victims a non-existent cloud mining service and investments in a fake bank, and then spending the proceeds on real estate and luxury cars
Estonian police and the FBI arrested two businessmen suspected of cryptocurrency fraud and laundering $575 million. Two Estonian citizens Sergei Potapenko, 37, and Ivan Turygin were detained in a joint operation Nov. 20 in Tallinn, the U.S. Department of Justice said.
Potapenko and Turygin are accused of deceiving hundreds of thousands of people. The suspects offered victims to enter into fraudulent contracts for cryptocurrency mining revenue with the HashFlare service, resulting in more than $550 million from 2015 to 2019. Also, the entrepreneurs are accused of receiving at least $25 million from people they induced to invest in Polybius Bank, a non-existent cryptocurrency bank.
Potapenko and Turygin are charged with conspiracy to launder criminal proceeds using shell companies and fake contracts and accounts. The money laundering scheme, according to the U.S. Justice Department, involved at least 75 properties, six luxury cars, cryptocurrency wallets and thousands of cryptocurrency mining machines.
The arrests were part of a U.S. criminal investigation. More than 100 police officers, including about 15 FBI agents, participated in the joint operation, the Estonian publication ERR.ee reported. The U.S. is requesting that the suspects be arrested for the duration of the investigation and that they be extradited. If Potapenko and Turygin are proven guilty, they face up to 20 years in prison.
In late August, the internationally wanted founder of the Turkish crypto-exchange Thodex Faruk Fatih Ozer was detained in Albania. He suddenly left Turkey in April 2021, and the platform ceased operations. More than 2,000 Thodex customers sued it, alleging fraud and the theft of millions of dollars.