Two Estonians are facing trial in the US for a $575 million cryptocurrency fraud
Estonian police arrested two men who created a pyramid scheme, aka the HashFlare mining service
Two men have been detained by Estonian police on suspicion of taking part in a $575 million bitcoin fraud according to US officials.
In an unrestricted indictment filed in US District Court in Seattle, Sergei Potapenko and Ivan Turogin, both 37 years old, were accused of conspiring to commit wire fraud and money laundering. They worked together with four unnamed co-conspirators who had addresses in Switzerland, Estonia and Belarus.
Authorities assert that between 2015 and 2019 the defendants tricked several individuals into investing in a virtual currency bank named Polybius Bank and buying contracts for a cryptocurrency mining business called HashFlare. The businesses were actually pyramid schemes.
The men are accused of laundering money from a scheme by purchasing luxury vehicles and real estate through front companies.
The cryptocurrency industry has experienced its fair share of volatility and discontent this year, including a sharp decline in the price of bitcoin and other digital assets. Early this month, the third-largest cryptocurrency exchange FTX went under as a result of the virtual equivalent of a bank run.
Given the failure of FTX and other supposedly healthy corporations, some people have compared the current scenario to Wall Street firms failing during the 2008 financial crisis.
