The US court has begun the trial of the defendants in the $575 million HashFlare cryptocurrency mining fraud case

On May 31st, according to a press release issued by the Department of Justice (DOJ), Estonian citizens Sergei Potapenko and Ivan Turžgin appeared in court for the first time yesterday in an alleged cryptocurrency fraud case. The Western District of Washington previously accused them of operating the fraudulent cryptocurrency mining service HashFlare from 2015 to 2019, luring hundreds of thousands of victims into investing more than $550 million, but the promised share of the mining did not materialize. In another scheme in May 2017, Potapenko and Turogin raised at least $25 million by investing in Polybius, a company they claimed would set up a virtual currency bank. Although Polybius promised dividends from its profits, the bank was never established and most of the funds were allegedly transferred to accounts controlled by the defendants.
The Justice Department further charged the pair with laundering money through shelf companies, fake contracts and invoices to purchase 75 real estate properties, six luxury cars, cryptocurrency wallets and thousands of mining machines. They face conspiracy to commit wire fraud, 16 counts of wire fraud and conspiracy to launder money, each of which carries a maximum penalty of 20 years in prison.