Sergei Potapenko and Ivan Turõgin, founders of cryptocurrency mining service HashFlare, avoided additional prison time after pleading guilty to orchestrating a $577 million Ponzi scheme. U.S. District Judge Robert Lasnik sentenced them to 16 months time served—matching their custody period since extradition from Estonia in May 2024—along with $25,000 fines each and 360 hours of community service to be completed under supervised release in Estonia.
Prosecutors had sought 10-year prison terms, calling the operation a "classic Ponzi scheme" that fabricated mining profits between 2015-2019. The DOJ revealed fake dashboards masked nonexistent mining operations while funds from new investors paid earlier clients. Potapenko and Turõgin diverted millions to personal luxuries, including Bitcoin purchases, real estate, and private jet trips. Though defense lawyers claimed minimal victim losses—citing $400 million in forfeited assets—prosecutors emphasized 440,000 victims globally suffered in what Seattle courts deemed their largest fraud case.
The sentencing followed an unusual immigration twist: Homeland Security issued deportation orders despite judicial requirements to remain in the U.S., though the men ultimately stayed for proceedings. The DOJ is considering an appeal of the sentence.