Estonian nationals sentenced in Seattle for cryptocurrency Ponzi scheme
Aug 12, 2025, 6:04 PM
Gold Bitcoins are seen in the window of a Bitcoin and cryptocurrency exchange office. (Photo: Chris McGrath, Getty Images)
(Photo: Chris McGrath, Getty Images)
Two Estonian nationals have been sentenced to time served in connection with a cryptocurrency Ponzi scheme that defrauded hundreds of thousands of victims worldwide, including in the United States.
Sergei Potapenko and Ivan Turõgin, both 40, were sentenced in U.S. District Court in Seattle on Tuesday to 16 months in prison. In addition to that time, which they have already served, they were each ordered to pay a $25,000 fine and complete 360 hours of community service.
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Estonian nationals’ cryptocurrency scheme
The scheme involved a purported cryptocurrency mining service called HashFlare.
Prosecutors said it sold contracts promising customers a share of profits from mining.
“Between 2015 and 2019, HashFlare sales totaled more than $577 million, relying on fake online dashboards that falsely reported mining activity and returns,” according to a news release from the U.S. Attorney’s Office. “HashFlare lacked the computing capacity to mine the vast majority of cryptocurrency it claimed to generate.”
Potapenko and Turõgin used investor funds to purchase real estate, luxury vehicles, and to fund investment and cryptocurrency accounts for their personal use, the release said.
Authorities seized assets valued at more than $450 million, which will be used to compensate victims.
“Prosecutors had argued for a ten-year prison term,” the release said. “The Department of Justice is considering whether to appeal the sentence.”
If you believe you may have been a victim of this scheme, you can visit this website.
Frank Lenzi is the News Director for KIRO Newsradio. Read more of his stories here.
