{"id":24054,"date":"2022-11-22T08:22:03","date_gmt":"2022-11-22T13:22:03","guid":{"rendered":"http:\/\/worldjusticenews.com\/news\/?p=24054"},"modified":"2022-11-22T08:22:03","modified_gmt":"2022-11-22T13:22:03","slug":"estonian-duo-accused-of-575m-cryptocurrency-scam","status":"publish","type":"post","link":"https:\/\/worldjusticenews.com\/news\/2022\/11\/22\/estonian-duo-accused-of-575m-cryptocurrency-scam\/","title":{"rendered":"Estonian duo accused of $575m cryptocurrency scam"},"content":{"rendered":"
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Police in Estonia have arrested two men suspected of running a $575m (\u00a3485m) cryptocurrency scam involving hundreds of thousands of victims.<\/b><\/p>\n<\/div>\n<\/div>\n

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Estonian police investigated the case with the FBI, and US authorities want to extradite the pair – Estonians Sergei Potapenko and Ivan Turogin.<\/p>\n<\/div>\n<\/div>\n

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The two 37-year-olds allegedly got people to invest in a cryptocurrency mining service called HashFlare and a fake virtual bank called Polybius.<\/p>\n<\/div>\n<\/div>\n

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A US indictment has been issued.<\/p>\n<\/div>\n<\/div>\n

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A\u00a0statement from the US Department of Justice (DoJ)<\/a>\u00a0says the pair are accused of wire fraud and conspiracy to commit money laundering – crimes punishable by up to 20 years in prison.<\/p>\n<\/div>\n<\/div>\n

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The defendants have appeared in court in the Estonian capital Tallinn and are being held pending extradition to the US, the statement says.<\/p>\n<\/div>\n<\/div>\n

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There was no immediate comment from their representatives.<\/p>\n<\/div>\n<\/div>\n

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Giving details of the alleged scheme, the DoJ says the two defrauded victims by offering them the chance to buy into HashFlare’s cryptocurrency mining operations.<\/p>\n<\/div>\n<\/div>\n

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Crypto mining uses computers to generate virtual coins for profit – a process that consumes significant amounts of computing power.<\/p>\n<\/div>\n<\/div>\n

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Customers around the world are said to have purchased more than half a billion dollars’ worth of HashFlare contracts from 2015 to 2019. But the operation allegedly overstated its capabilities.<\/p>\n<\/div>\n<\/div>\n

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The DoJ alleges that victims were also promised dividends if they invested in Polybius, a virtual bank Mr Potapenko and Mr Turogin said they had set up.<\/p>\n<\/div>\n<\/div>\n

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The defendants are said to have raised $25m this way – but no bank was ever formed.<\/p>\n<\/div>\n<\/div>\n

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They used shell companies to launder criminal proceeds, buying at least 75 properties and luxury cars, DoJ says.<\/p>\n<\/div>\n<\/div>\n

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Oskar Gross of Estonia’s police cybercrime bureau described the joint investigation – which involved 100 personnel including 15 from the American side – as “long and vast”.<\/p>\n<\/div>\n<\/div>\n

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It was “one of the largest fraud cases we’ve ever had in Estonia”, he said on Monday, quoted by Estonia’s ERR news agency.<\/p>\n<\/div>\n<\/div>\n

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The country’s authorities also warned that technology had “broadened the risk of fraud”.<\/p>\n<\/div>\n<\/div>\n

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The case comes at a time of heightened nervousness in the cryptocurrency market, following the collapse of the world’s second-largest crypto exchange, FTX.<\/p>\n<\/div>\n<\/div>\n

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The firm filed for bankruptcy in the US last week, and\u00a0owes its 50 largest creditors almost $3.1bn (\u00a32.6bn), according to a court filing<\/a>.<\/p>\n

Source: bbc.co.uk<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Police in Estonia have arrested two men suspected of running a $575m (\u00a3485m) cryptocurrency scam involving hundreds of thousands of victims. Estonian police investigated the case with the FBI, and US authorities want to extradite […]<\/a><\/div>\n","protected":false},"author":1,"featured_media":24055,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":"","footnotes":""},"categories":[109,2,3,6],"tags":[4686,8495,8953,1172,8954,1484,8955,4974,803],"class_list":{"0":"post-24054","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headline","8":"category-news","9":"category-usa","10":"category-world","11":"tag-cryptocurrency","12":"tag-cybercrime","13":"tag-estonia","14":"tag-fbi","15":"tag-hashflare","16":"tag-money-laundering","17":"tag-polybius","18":"tag-us-department-of-justice","19":"tag-wire-fraud","20":"pmpro-has-access"},"_links":{"self":[{"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/posts\/24054","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/comments?post=24054"}],"version-history":[{"count":2,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/posts\/24054\/revisions"}],"predecessor-version":[{"id":24057,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/posts\/24054\/revisions\/24057"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/media\/24055"}],"wp:attachment":[{"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/media?parent=24054"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/categories?post=24054"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/worldjusticenews.com\/news\/wp-json\/wp\/v2\/tags?post=24054"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}