The founder of Hashfrey, the crypto mining company behind the $577 million Ponzi scheme, escaped additional prison time after acknowledging his role in the scheme.
Sergei Potapenko and Ivan Targin have been in custody for 16 months, with Seattle Federal Court Judge Robert Lasnik giving time at the sentencing hearing on Tuesday.
He also ordered $25,000 fines and 360 hours of community service to be completed during the supervised release.
The Justice Department said Tuesday that prosecutors asked the duo to be jailed for 10 years and is considering whether it should appeal the sentence, but Potapenko and Tagen had asked to provide time.
The pair were arrested in Estonia in November 2022 and detained for 16 months before being extradited to the US in May 2024, where they pleaded guilty to conspiracy to commit wire fraud.
The biggest fraud case in court history
Seattle prosecutors said it was the biggest fraud case they have ever tried, and the argument that they rely heavily on the pair to win in 10 years of prison.
Judge Lasnik appeared to have found merit in the discussion between Potapenko and Targin that 440,000 customers accused of ripping 440,000 customers had confiscated more than $400 million in assets as part of a plea deal in February, making it seemingly beneficial to Potapenko and Targin that they had not suffered any significant losses.
The Hashflare founder also noted that 390,000 customers who spent $487 million on Hashflare mining contracts have withdrawn $2.3 billion.
Hashflare “classical ponge” said the prosecutor
Prosecutors alleged that between 2015 and 2019, Hashflare’s revenue totaled over $577 million, posting a fake dashboard that misreported the company’s mining capabilities and posted returns that investors had made from the scheme. We paid existing members funds from new clients.
“These defendants ran a classic Ponzi scheme that included flashy assets: the mi-riage of cryptocurrency mining,” Thiel Ruti Miller’s representation in a statement from the DOJ.
“Like the classic ponge, they bought more than 12 trips on their own Bitcoin, real estate, luxury cars, expensive gems, chartered private jets, and diverted millions of dollars into their own profits.”
The pair were told to “self-abolize” before the verdict
The pair said they received a letter in April from the Department of Homeland Security directing them to be “immediately deported.” The attorney at the time said.
The founder of Hashflare expressed his desire to return home on multiple occasions.
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
