HashFlare Co-Founders Avoid Additional Jail Time in $577M Crypto Ponzi Scheme

Sergei Potapenko and Ivan Turõgin, co-founders of the defunct cryptocurrency mining service HashFlare, received no additional prison time beyond the 16 months already served for orchestrating a $577 million Ponzi scheme. Seattle Federal Court Judge Robert Lasnik imposed fines of $25,000 and 360 hours of community service, to be completed under supervision in their native Estonia.

Prosecutors had sought a decade-long sentence for the pair, who deceived 440,000 investors between 2015 and 2019 through fabricated mining returns and classic Ponzi payouts. The case stands as the largest financial fraud ever prosecuted in Seattle's federal district.

HashFlare's operations involved falsified dashboards exaggerating Bitcoin mining capabilities, using new investor funds to pay earlier participants. The Estonian nationals were extradited to the U.S. in 2024 after their 2022 arrest, subsequently pleading guilty to wire fraud conspiracy charges.