DOJ Considers Appeal in $577M HashFlare Ponzi Case as Founders Avoid Additional Jail Time

Sergei Potapenko and Ivan Turõgin, the masterminds behind the $577 million HashFlare cryptocurrency Ponzi scheme, have been sentenced to time served after 16 months in custody. A Seattle court ruled their detention period sufficient, despite prosecutors pushing for a decade-long sentence.

The defendants must forfeit $450 million in assets—including crypto holdings, real estate, and mining equipment—to compensate over 400,000 victims. U.S. District Judge Robert S. Lasnik ordered fines of $25,000 each and 360 hours of community service during supervised release in Estonia.

While the Department of Justice weighs an appeal, this case underscores the legal system's struggle to calibrate punishments for large-scale crypto frauds. The forfeited assets will undergo a remission process, though victim compensation details remain pending.