HashFlare Co-Founders Ordered to Leave US Despite Court Order

Sergei Potapenko and Ivan Turõgin, the Estonian co-founders of the defunct crypto mining firm HashFlare, have been ordered to leave the U.S. immediately by the Department of Homeland Security (DHS), despite a court order requiring them to remain in King County, Washington. This directive was communicated through emails sent to both individuals on April 6, warning of potential law enforcement actions, including criminal prosecution and civil fines, if they did not comply.

The DHS's directive contradicts a court order that mandates Potapenko and Turõgin to stay in King County. The prosecution team in their case is reportedly working with DHS to resolve the issue by applying for an extension of their parole in the U.S. However, Turõgin received a second message with the same language on April 11, reiterating the DHS's demand for their immediate departure.

The lawyers for Potapenko and Turõgin highlighted the "disturbing" nature of the communications, citing recent news about wrongful deportations, which added to their clients' fear. They noted that immigration authorities can make mistakes, leading to individuals being wrongfully detained or deported.

The HashFlare case involves the defendants being arrested in Tallinn in November 2022 and extradited from Estonia in May 2024. They have since remained in King County, Washington, under bond conditions set by the court. In February, they pled guilty to conspiracy to commit wire fraud for falsely marketing cloud-based crypto mining contracts through their company, HashFlare, which operated from 2015 to 2019.

The defendants also admitted to a second scheme involving a 2017 initial coin offering for a digital bank project called Polybius, which raised $31 million. Instead of using the proceeds to create a digital bank, Turõgin and Potapenko used a large portion of the funds for their own personal benefit. As part of the plea deal, the defendants agreed to forfeit approximately $400 million in assets, including real estate, crypto, vehicles, and mining equipment. Sentencing is scheduled for August 14.

The attorneys for Potapenko and Turõgin indicated in their letter that if the DHS issue is not resolved, they will request a hearing requiring agency counsel to appear. Potapenko’s lawyer, Mark E. Bini, stated that his client has followed all conditions of release and is committed to fully complying. Turõgin’s counsel, Andrey Spektor, expressed hope that the judge, not DHS, will ultimately decide when it is time for his client to return home, emphasizing that Turõgin caused no financial harm and contributed to breakthroughs in the crypto space.