HashFlare Founders Escape Additional Prison Time After $577M Crypto Scam Conviction

The founders of HashFlare, Sergei Potapenko and Ivan Turõgin, have avoided additional prison time following their conviction in a $577 million Ponzi scheme. A Seattle Federal Court Judge, Robert Lasnik, initially sentenced them to 16 months in prison, but because they had already served that time in custody since their 2022 indictment, no further incarceration was imposed. Instead, the court ordered each of them to pay a $25,000 fine, perform 360 hours of community service under supervised release, and forfeit over $450 million in assets, including real estate, luxury vehicles, cryptocurrency, and mining equipment [1].

The U.S. government and its international partners have already seized the majority of these assets. The court has yet to provide details regarding the compensation process for victims, but it has been confirmed that the supervised release will be served in Estonia [1]. While the defense requested and was granted time served, prosecutors, led by Assistant U.S. Attorneys Andrew Friedman and Sok Jiang, argued that a 10-year prison sentence would have been more appropriate. They emphasized that this case represented the largest cryptocurrency fraud ever prosecuted and used this justification to advocate for the longer sentence [1].

Acting U.S. Attorney Teal Miller expressed concern over the financial and emotional impact the scheme had on victims. He stated that the “vast majority” of those affected suffered serious losses, which were worsened by the defendants’ use of the stolen funds to purchase private jets, luxury cars, and real estate [1]. Miller criticized the defendants for profiting from a “mirage of cryptocurrency mining” and using misleading claims to attract victims.

Judge Lasnik, however, seemed to accept the defense’s argument that the 440,000 customers had not suffered significant losses. According to court records, approximately 390,000 customers who had collectively invested nearly $487 million in HashFlare mining contracts withdrew roughly $2.3 billion [1]. Turõgin’s attorney, Andery Spektor, claimed no customer had experienced actual harm, though he acknowledged that the company may have misrepresented its mining output. The defense also argued that HashFlare had returned over $350 million in crypto to victims between 2022 and 2025 [1].

Prosecutors countered these claims, asserting that the data provided by the defense to support the claim of “no harm” was fabricated. They argued that the expert evidence used in the defense was based on the earnings of HashFlare investors rather than the losses experienced by victims. The Department of Justice remains dissatisfied with the outcome and has indicated its intent to consider filing an appeal [1].

The case stems from allegations that the defendants swindled customers by providing false information about the company’s mining capacity. It is claimed that HashFlare mined less than 1% of what it advertised and defrauded victims of over $550 million between 2015 and 2019. In 2017, the company also allegedly raised $25 million from investors under the pretense of launching the Polybus digital bank [1].

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Source: [1] HashFlare founders dodge extra prison time – (https://coinmarketcap.com/community/articles/689c3da125f4777113d89cc3/)