US prosecutors double the 10-year sentence for co-founder of Hashflare

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The two Estonians who co-founded Cryptocurrency Mining Services are scheduled to be sentenced Thursday after pleading guilty to conspiracy to commit wire fraud as part of a plea deal with prosecutors.

In an application Monday, US prosecutors pushed back against many of the claims made by lawyers for Hashfulle co-founders Sergei Potapenko and Ivan Tourogin in their ruling recommendations.

The two men kept their time, but lawyers representing the US government asked the judge to sentence him to 10 years in prison, claiming that “the harm that has suffered by the victims of Hashflare is no longer realistic.”

“(…) Defendants argue that Hashfair victims suffered losses on a partial basis (expert opinion), and that some in part on small attempts to distrust the victim’s statement,” the prosecutor said. “However (…) expert opinion is essentially based on the expected profits of hashfraa investors. Data that the accused has been granted in a judicial agreement – the defendants’ own numbers significantly support the story of the victims they are trying to discredit.”

Supplements for US Government Judgment Recommendations for Sergei Potapenko and Ivan Turogin. Source: US District Court for the Western District of Washington, Seattle

The co-founder of Hashflare agreed to confiscate benefits on assets frozen by the US government in 2022, alleging that the user had not suffered a significant loss after the user returned $400 million in cryptography to the user.

Potapenko and Tourogin, who were indicted in October 2022, were arrested and detained in Estonia before being extradited to the US in May 2024. Both have been released on bail since July 2024 and pleaded guilty to conspiracy to commit wire fraud in February.

Is it an order to “self-sell” before the verdict?

During the court case, the co-founder of Hashhura received a letter from the U.S. Department of Homeland Security directing them to “leave the United States” as part of advancing mass deportation. It is unclear whether the judge will consider the status of immigrants in the sentence.

Cointelegraph contacted Potapenko’s attorney for comments about the sentencing hearing, but had not received a response at the time of publication.