Two arrested in Estonia for alleged $575 million cryptocurrency fraud

Police in Estonia have arrested two men accused of cryptocurrency fraud worth $575 million, US authorities said.

An indictment unsealed in US District Court in Seattle charges Estonian citizens Sergei Potapenko and Ivan Turogin, both 37, of wire fraud and conspiracy to commit money laundering.

According to the indictment, they worked with four unnamed co-conspirators who lived in Estonia, Belarus and Switzerland.

Prosecutors said the suspects tricked hundreds of thousands of people into buying contracts for a cryptocurrency mining service called HashFlare and investing in a virtual currency bank called Polybius Bank between 2015 and 2019.

In reality, the companies operated as pyramid schemes, prosecutors said.

The men are accused of using shell companies to launder the proceeds of the scam to buy homes and luxury cars.

The couple is being held in custody in Estonia awaiting extradition to the US, the US Department of Justice said.

“These defendants used both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining to commit a massive Ponzi scheme,” Seattle U.S. Attorney Nick Brown said in a press release.

US and Estonian authorities are working to seize the defendants’ property and bank accounts, Mr Brown said.

Seattle court records did not show whether the men hired attorneys.

Some of the victims were in Washington state, authorities said.

The cryptocurrency industry has seen its fair share of volatility and turbulence this year, including a sharp fall in the price of bitcoin and other digital assets and the collapse of the FTX exchange, which experienced the crypto equivalent of a bank run.

https://www.independent.ie/business/world/two-arrested-in-estonia-over-alleged-575m-cryptocurrency-fraud-42165594.html Two arrested in Estonia for alleged $575 million cryptocurrency fraud

Fry Electronics Team

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