Two arrested in massive $575m cryptocurrency 'Ponzi scheme'

[dubst4r]

Two Estonian men were arrested yesterday for their alleged roles in running a series of cryptocurrency and money laundering scams that bilked $575 million from "hundreds of thousands of victims" while the suspects used their ill-gotten gains to buy real estate and luxury cars.…

Sergei Potapenko and Ivan Turõgin, both 37, were arrested in Tallinn, Estonia following a joint investigation by US and Estonian law enforcement. The men have been charged with 18 counts of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, and they each face a maximum of 20 years behind bars.

More @ https://www.msn.com/en-ca/news/crime/two-arrested-in-massive-575m-cryptocurrency-ponzi-scheme/ar-AA14ogMd?cvid=fc135a2e6a81404c85b7de1af69e6a50&ocid=winp2fptaskbarmouseenter

[1715280384]

1715280384

[1715280384]

1715280384

[1715280384]

1715280384

[1715280384]

1715280384

[1715280384]

1715280384

[Zlantann]

Two Estonian men were arrested yesterday for their alleged roles in running a series of cryptocurrency and money laundering scams that bilked $575 million from "hundreds of thousands of victims" while the suspects used their ill-gotten gains to buy real estate and luxury cars.…

Sergei Potapenko and Ivan Turõgin, both 37, were arrested in Tallinn, Estonia following a joint investigation by US and Estonian law enforcement. The men have been charged with 18 counts of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, and they each face a maximum of 20 years behind bars.

More @ https://www.msn.com/en-ca/news/crime/two-arrested-in-massive-575m-cryptocurrency-ponzi-scheme/ar-AA14ogMd?cvid=fc135a2e6a81404c85b7de1af69e6a50&ocid=winp2fptaskbarmouseenter

Potapenko and Turõgin has no intention of adding value to the crypto market based on what I read from the link OP provided. Their intention from the onset of establishing both HashCoins, HashFlare and Polybius Bank was just to defraud people. Most people that fall victims to these set of businesses are driven by the desire to get-rich-quick. Most of these fraudulent businesses entice their targets with mouthwatering profits or cheap products or services that they cannot despise due to greed. It is a good development that they have been arrested and hopefully they would get the stipulated punishment. It would be very good for these fraudulent individuals that keeps giving the crypto space a bad name to be arrested and punished accordingly. 

[btc_angela]

Yes, this two are the founder of HashFlare, and this is their official post here,  [NEW] Hashflare cloud mining.

Seems that many has fallen for their scams from this community.

Here is the official statement from the FBI, there is a brief questionnaire that you have to fill up if you are a victim.

https://www.fbi.gov/how-we-can-help-you/victim-services/seeking-victim-information/seeking-victims-in-the-hashflare-investigation
And probably this news has affected the market as well, as we have said the price going to like $15,750 again.

[Aanuoluwatofunmi]

Snip

If am to correct something about this thread then I will like to suggest it moved to scam accusation or legal where discussions in this regard were been discussed broadly since it's a scam related matters that has led to their arrest since the legal law has also been involved in the same way, but this could be more interesting as the case need a constant follow up on further updates.

[coupable]

And probably this news has affected the market as well, as we have said the price going to like $15,750 again.

I do not think that this has anything to do with the current price movement of Bitcoin, which has been suffering from fluctuations since the FTX scandal. The money that the two arrested people stole was not put on the market, and most likely it will be returned to its owners, as long as there is concern from the FBI, which called on the victims to declare the fraud they were subjected to. The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

[TimeTeller]

And probably this news has affected the market as well, as we have said the price going to like $15,750 again.

I do not think that this has anything to do with the current price movement of Bitcoin, which has been suffering from fluctuations since the FTX scandal. The money that the two arrested people stole was not put on the market, and most likely it will be returned to its owners, as long as there is concern from the FBI, which called on the victims to declare the fraud they were subjected to. The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

I also believe that it has nothing to do with the current market performance.
It is more on this FTX fallout. Anyway, a lot of us here know by now that cloud mining is really a bad investment.
But I did invest on known cloud mining sites before but unfortunately, didn't get the profits, and lost also.
Good for the community that we lessen this kind of fraudulent people, capitalizing from the trust of users.
Hopefully, some of this amount will be recovered and returned to those people who were owed by their scheme.

[Hispo]

-snip-

The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

It is exactly what I thought. I checked these people account here (the one they used to promote their scam) and I realized it was created back in 2015, which I did not expect from a ponzi squeme.

This leads me to assume these criminals went out their way to give as much aura of legitimacy as possible to extent the life of their shady "business", so they could scam more people.

I hope the FBI is able to seize and help victims to recover part of their capital.

[blockman]

Good job to the FBI and I wish that they could seize more of the same companies that have victimized a lot of people.

The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

They don't look big and that's why they haven't taken any attention since then. Well, with this taking them down, there will be other rounds for other companies that we shall see.
Hopefully the FBI will go more active on it and take more of those fraud owners that has taken a lot of money from the people they've taken advantage of.

[sheenshane]

Great job to the FBI they need more crypto-related investigators because there are a lot of cases like this at this moment.
It's 20 years of sentence behind the bars and I hope those who think of fraud might afraid of this, if your age was 37 plus additional 20 years of sentence, you're getting old in prison.

I hope the FTX case will solve the same, there are too many innocent people that become a victim of this wire fraud and it might also be because of their greediness they fall into this Ponzi Scheme which looks like a business from the start.

People must learn about this.

[Darker45]

As always the case with these schemes, it takes two to tango. The predators are making so much money because majority of us not only lack the basic awareness but are also greedy. Greed and ignorance are a perfect recipe for losing money to scammers. Red flags, although obvious, are oftentimes set aside when offered with a huge ROI.

This is a big success not only to the authorities but also to the victims. It might take time, or perhaps forever, for them to get back their money but they've learned precious lessons for them to share. They're now hard and convincing proofs to their family and friends that cloud mining and other crypto investment opportunities are nothing but scams.

[gurbar_nakub]

Good riddance. HashFlare was a pure Ponzi. There was a referral program to attract new money.

[btc_angela]

And probably this news has affected the market as well, as we have said the price going to like $15,750 again.

I do not think that this has anything to do with the current price movement of Bitcoin, which has been suffering from fluctuations since the FTX scandal. The money that the two arrested people stole was not put on the market, and most likely it will be returned to its owners, as long as there is concern from the FBI, which called on the victims to declare the fraud they were subjected to. The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

I think you misunderstood me, yes we have been suffering from the fluctuations since the FTX scandal, but we have settled down around $16,200-$16,500. But when this news broke out, the price suddenly dip dive to $15,700 (but after that we have recovered again).

I also did not say that it was put in the market, what I'm trying to drive it is that the market is very volatile, everyone is at the edge that every negative news about bitcoin and crypto in general will have an impact in the price in short term.

Perhaps the two has been hiding for years that's why it took time for the US authority to find them. Nevertheless, we all know that they will used any force that they have in their arsenal to find the suspects. Doesn't matter if it takes 5 or 10 years.

And recently, they just had to make it serious, if I'm not mistaken, it will started maybe around 2019 or 2020 for them. So imagine the backlog of many crypto cases and so they have to prioritized which one should be given the man power by the FBI to chase.

[joniboini]

Nevertheless, we all know that they will used any force that they have in their arsenal to find the suspects. Doesn't matter if it takes 5 or 10 years.

While I appreciate the work, catching a culprit 10 years after a crime has been done should not be the way to go. The damage has been done by then and who knows how many victims have fallen. It's like saying it's fine if a shooter goes around the neighborhood for 10 years and shooting everybody everyday as long as he ends up in.

[omone1]

Yes, this two are the founder of HashFlare,

Seems that many has fallen for their scams from this community.

I invested some bitcoin in hashflare in 2018 by buying some mining power with the company, when it was time for me to withdrew my earnings, was told minimum withdrawal has been increased, I had to wait longer, after a while they said mining difficulties have increased and they terminated my contract, I had to perform some KYC and got rejected severally until I had write some messages to them before they just paid about 0.021BTC or so. The rest investment are gone. This was how genesis mining equally terminated my contract in 2017 citing mining difficulties. I stopped anything mining.

[OgNasty]

This topic has been beaten to death on Twitter lately, but it's absolutely shocking that people are arrested and vilified for running Ponzi schemes, while Sam Bank-Fraud is able to live in the Bahamas and fly around giving paid talks.  It's like the folks in control aren't even hiding it anymore.  They're directly lying and manipulating people, stealing their money and not even scared there could be consequences.  Meanwhile the news outlets cover for them so long as they're willing to vote democrat or have any political ties to their party.  The fact Sammy Fraud Boy is not cuddling with large unsavory characters in a county jail while awaiting trial right now should piss off everyone.

[kryptqnick]

I agree that financial crimes must be punished, but I don't think that letting the victims suffer from losses and spending taxpayer money on keeping convicts in prisons is the way to do it. Instead, the focus should be on paying back the money to victims and then some to the state, IMO.
It's also truly sad that people still fall for ponzi schemes so much, and I believe it's largely due to lack of financial literacy that they (we) should've received at school but didn't. But the focus shouldn't be that it was a crypto project. It was a scam, organized in a well-known way of scams.

[Simplycallmecollins]

There are really a lot of these guys out there developing strategies and schemes to take people's money away. In my last post I talked about one I got into. Also, I've learnt to make extensive research before venturing into any sort of scheme that promises return without little or no efforts or rewards that are too good to be true. It's really worrying.

[Dunamisx]

Two Estonian men were arrested yesterday for their alleged roles in running a series of cryptocurrency and money laundering scams that bilked $575 million from "hundreds of thousands of victims"

Despite the government regulations on cryptocurrency they find it difficult to curtail the act of scam related offences from all over the world because those involved are people that have more clue about the system they hijack and victimized, while those involved and scammed have no remedy to recovering their lost asset and this together with recent events on centralized exchanges hacks makes a big lesson for taught to why we must all keep safe with our bitcoin before they take it away from us by any careless means we give.

while the suspects used their ill-gotten gains to buy real estate and luxury cars

Any ill-gotten wealth from an evil means does not last long and it's been used to buy liabilities that will later present them a choke to their glutonic throat that always seek illegal means of acquiring things from others.

[coupable]

Good job to the FBI and I wish that they could seize more of the same companies that have victimized a lot of people.

The projects they worked on have been on the market since 2017, and it is strange that they were not discovered until after more than 5 years .

They don't look big and that's why they haven't taken any attention since then. Well, with this taking them down, there will be other rounds for other companies that we shall see.
Hopefully the FBI will go more active on it and take more of those fraud owners that has taken a lot of money from the people they've taken advantage of.

The big question in this case is whether users from outside the United States will be taken care of to be compensated and what are their chances of compensation if they cannot file claims from the countries in which they reside. The FBI does not think it will be keen on the interest of everyone around the world, even if they provide evidence informally, because I do not think it will help them in any way.

[teosanru]

Two Estonian men were arrested yesterday for their alleged roles in running a series of cryptocurrency and money laundering scams that bilked $575 million from "hundreds of thousands of victims" while the suspects used their ill-gotten gains to buy real estate and luxury cars.…

Sergei Potapenko and Ivan Turõgin, both 37, were arrested in Tallinn, Estonia following a joint investigation by US and Estonian law enforcement. The men have been charged with 18 counts of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, and they each face a maximum of 20 years behind bars.

More @ https://www.msn.com/en-ca/news/crime/two-arrested-in-massive-575m-cryptocurrency-ponzi-scheme/ar-AA14ogMd?cvid=fc135a2e6a81404c85b7de1af69e6a50&ocid=winp2fptaskbarmouseenter

Thankfully such people are caught and honestly they should be heavily penalized and should be given a lot of punishment as well. These people are not only spoiling the name of crypto currency world but are also spoiling the confidence of users who are already transacting in it. But also this is a good example that how can governments even catch scams related to cryptocurrencies as well pretty easily.