Crime does not pay – If the revelations about the fall of the FTX empire today occupy the top of the bill, too many stories of embezzlement and scams have already harnessed the enthusiasm around Bitcoin (BTC) cryptos in the past. Although the sad scam of HashFlare occurred mainly between 2015 and 2019, it is only now that the justice catches up two of its main promoters.
3 years after the fall of HashFlare, the sword of Justice falls
Pyramid scheme scams, or ponzi schemehave been around since long before the invention of Bitcoin and cryptos. They have always known how to exploit popular enthusiasm to defraud overconfident investors.
In the case of HashFlarethis company created in 2015 claimed to offer “Cloud Mining”. Its investors thought buy computing power (hashrate), to indirectly mine bitcoins and other Proof of Work (PoW) based cryptos.
But according to a press release from Department of Justice American published this November 21, 2022, it was none nothing. Indeed, the communication announces that two Estonian citizens have been arrested yesterday in Tallinn (capital of Estonia) in this matter. From 18 counts brought against them, are the cryptocurrency fraud and the plot money laundering.
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Up to 20 years in prison for these fake bitcoin miners
The accused, Sergei Potapenko and Ivan Turoginboth aged 37, allegedly defrauded “hundreds of thousands of victims”. This, both with the false rental of HashFlare’s mining devices ($550 million), but also with a fake bank crypto, called Polybius Bank ($25 million).
So these are altogether $575 million allegedly extorted from the victims. This money was actually laundered through front companies to buy real estate and luxury cars.
“New technologies are making it easier for bad actors to take advantage of innocent victims – both in the United States and abroad – in increasingly complex scams. »
Assistant Attorney General Kenneth A. Polite, Department of Justice Criminal Division
If found guilty, the two Estonians could face a sentence of up to 20 years imprisonment. This gives an idea of what could happen to FTX executives. When we know that the crypto-stock exchange must 3.1 billion dollars just to his 50 biggest creditorswhile Sam Bankman-Fried’s group does not own more than $1.24 billion in cashwe are already wondering what the verdict of justice will be.
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