The Estonian government announced that it satisfied the conditions stipulated by the Court for extradition of the masterminds behind the HashFlare Ponzi scheme.
Estonian pair Ivan Turogin and Sergei Potapenko are due for extradition to the United States, where they face 18 charges and potentially lengthy sentences for running the fraudulent Ponzi scheme.
Estonia Admits Preparedness to Extradite HashFlare Co-founders
Turogin and Potapenko are identified as the co-founders behind the now-shuttered Bitcoin cloud miner HashFlare, who are staring at extradition to the United States. The Estonian citizens’ are slated for extradition previously halted by the Court of Appeal in November.
The Estonian government confirmed meeting the conditions stipulated by the appellate Court in its decision to halt the extradition temporarily.
The extradition of Turogin and Potapenko will allow the litigation of the case where they will battle 18 counts of conspiring to money laundering in the US.
Each of the accused stares for up to two decades behind bars. The US authorities leveled charges against the duo, alleging their company, though a leading cloud miner, ran a Ponzi scheme.
Turogin and Potapenko’s arrest in November 2022 involved joint efforts to investigate their disguised operations. Their arrest in Estonia involved coordinated input from the US and Estonian authorities.
A review of the case shows that the Estonian government had approved extraditing Turogin and Potapenko last year. The accused successfully challenged the September decision, and the appellate Court overturned the approval granted by the lower Court.
The Court of appeal indicated that the lower Court overlooked assessing the conditions within the US detention facilities. The Court directed that Turogin and Potapenko are eligible for monetary compensation.
The Estonian government revealed that it concluded collecting evidence regarding the conditions in the US detention facilities. A local publication platform, Postimees, indicated that the Estonian government ruled out extradition, infringing on the pair’s fundamental rights. The government dismissed the argument that extraditing the accused would not lead to disproportionate violations of their fundamental rights.
HashFlare Implodes with Million-Dollar Receipts
HashFlare allegedly received $575 million before its implosion in 2019. The collapse followed a troubled spell traced to 2018. The platform shutdown prompted miners to claim the absence of revenue.
The US Department of Justice (DOJ) illustrated that the Estonian duo – Turogin and Potapenko issued contracts allowing customers to rent a portion of HashFlare’s mining operations for a fee.
The DOJ indicated that the miners renting the equipment in return cede a percentage of virtual currency realized by the portion of the operation. The Justice Department indicated that HashFlare hardly owned the equipment it alleged, not even 1% of computing power.
The DOJ added that the defendants failed to honor the withdrawal requests by investors. The DOJ said that requests to withdraw the proceeds from mining activities were resisted or settled off via virtual currency the duo acquired on the open market and not the mined currency.
The DOJ estimated the victims of the HashFlare scam are hundreds of thousands. The DOJ indicated that the US. The Federal Bureau of Investigation (FBI) is making progress in locating the victims.
The Estonian duo faces additional charges for alleged collection of $25 million. The pair duped investors that they would establish a digital bank identified as Polybius. The DOJ indicates that the defendants failed to pursue the project.
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