- The founders of the Hashflare scam may avoid US extradition after an Estonian court identified issues in the investigation against them
- A recent court ruling to send them to the US for trial has been overturned due to concerns over the conditions in the US and the handling of the case
- The government can appeal the decision by the court over the $575 million fraud and money laundering conspiracy
The founders of the Hashflare mining scam might avoid extradition to the US after an Estonian court identified issues in the investigation against them. Sergei Potapenko and Ivan Turõgin were arrested last November on an 18-count indictment for allegedly operating a $575 million fraud and money laundering conspiracy through Hashflare, but a recent court ruling to send them to the US for trial has been overturned. The issues raised included the conditions of the US detention facility and the failure to verify important aspects of the case, although the government can appeal the loss.
$575 Million Allegedly Illegally Earned and Laundered
Hashflare, a significant player in the crypto cloud mining space, shuttered in 2018, citing market challenges, yet continued selling contracts into 2019, raising suspicions of financial stability. The founders allegedly amassed $575 million through the enterprise and a deceptive virtual currency bank, Polybius Bank. The pair invested the money in real estate and luxury cars amid accusations of laundering funds via shell companies.
Their dealings with US victims prompted an FBI investigation, revealing a complex web of deceit sewn by the pair in their attempts to hide their ill-gotten gains. An Estonian court approved extradition, but the pair filed an appeal, which was recently heard and awarded by the appeals court, which ruled that the Estonian government failed to conduct proper investigations and consider crucial circumstances before agreeing to extradition.
The court highlighted the lack of scrutiny regarding the conditions of the US detention facility and the failure to verify important aspects of the case. The court’s decision not only cancels the extradition but also imposes fines on the Estonian government, totaling 46,365 EUR ($50,809.65), along with reimbursing the defendants’ expenses and their families.
However, this decision itself is subject to appeal until December 11, 2023, leaving room for further legal developments in this complex case.
