US Appeals Time Served Sentences for HashFlare Founders, Drama Unfolds!

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Ah, the American justice system, always keeping things interesting. US prosecutors, evidently unsatisfied with the time served sentence handed to Sergei Potapenko and Ivan Turõgin, co-founders of the infamous crypto mining service, HashFlare, have decided to appeal. And not just any appeal-this one’s heading straight for the Ninth Circuit. Talk about aiming high!

The dynamic duo-Potapenko and Turõgin-spent a blissful 16 months in custody in their home country, Estonia, after their surprise arrest in October 2022. Fast forward to May 2024, and voilà, they’re in the US, pleading guilty to conspiracy to commit wire fraud. Everyone’s favorite kind of fraud, right? 😏

Now, the government wasn’t exactly thrilled with the outcome. Their argument? A solid ten years in prison for these two seems more fitting. After all, this $577 million Ponzi scheme is, according to them, the most significant fraud the court has ever seen. But hey, the co-founders thought they’d done their time, didn’t they? Time served, community service, and a neat little fine-what more could they ask for? Oh right, a fresh appeal. 🕵️‍♂️

On August 12, Judge Robert Lasnik of the Seattle Federal Court handed down his decision: a $25,000 fine, 360 hours of community service, and supervised release in Estonia. Perfect for a relaxing post-crime holiday. But don’t worry, there’s more to this story, and it’s far from over. The appeal is on, and this plot thickens. 🥳

Courtroom drama and crypto crime

HashFlare Founders Say Victims Were Repayed, But Not So Fast

Prosecutors say HashFlare’s sales raked in a cool $577 million between 2015 and 2019. Of course, nothing ever looks as good as the dashboard reports they posted-filled with fancy lies about mining capacity and sky-high returns. All part of the grand Ponzi scheme, naturally. But Potapenko and Turõgin are not going down quietly. They argue that despite the overstatements, their customers ended up with crypto worth more than their original investment, thanks to that *tiny* thing we call the crypto market boom.

And they also threw in a little nugget: victims were being paid from the $400 million+ worth of assets they forfeited. Sounds like a fairytale, doesn’t it? But the government begs to differ, accusing them of fabricating data. Well, this is a real courtroom drama, isn’t it? 🎭

Sleuths Warn of Crypto Crime, No Consequences

Blockchain crime investigators, like ZachXBT and Taylor Monahan, warned in June that the lack of serious consequences for bad actors was only fueling the crypto crime fire. Because why stop scamming if there’s no real punishment? There’s a growing concern that regulators have swung from one extreme to another-overreaching to underreacting. Seems like they’ve learned nothing from their past mistakes. 🙄

And hold onto your wallets, because crypto crime losses just hit a new record in the first half of 2025. Almost as high as the previous year’s total! And this isn’t even the end of it-buckle up, folks. 🚀

Other Ponzi Operators Getting Their Time Behind Bars

Of course, Potapenko and Turõgin are not the only ones living the prison dream. Former rugby player Shane Donovan Moore is currently serving two and a half years for defrauding investors out of $900,000. But hey, at least he gets to swap tales with Dwayne Golden, who was sentenced to eight years in June for his role in a $40 million crypto Ponzi scheme. This is starting to sound like the worst episode of a financial true crime show, isn’t it? 🤔

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2025-08-27 09:14