HashFlare
An Estonia-based cloud-mining operation that sold ~$577M in 'mining' contracts (2015–2019) while owning a tiny fraction of the advertised hashpower. Founders Sergei Potapenko and Ivan Turõgin pleaded guilty to wire-fraud conspiracy in 2025 and agreed to forfeit $400M+.
Also known as: HashFlare, Sergei Potapenko, Ivan Turogin, Ivan Turõgin, Polybius
Summary
HashFlare was a cloud-mining service that sold contracts entitling customers to a share of cryptocurrency it claimed to mine. According to the U.S. DOJ, between 2015 and 2019 its sales exceeded $577 million, but HashFlare possessed only a tiny fraction (well under 1%) of the computing power it claimed, and its dashboard showed customers falsified mining "profits." [1][2]
Outcome
Estonian nationals Sergei Potapenko and Ivan Turõgin, both 40, were arrested in Tallinn in November 2022 and extradited to the U.S. In February 2025 each pleaded guilty to one count of conspiracy to commit wire fraud (max 20 years) and agreed to forfeit assets valued at more than $400 million for victim compensation. Prosecutors said they also raised about $25 million in a related "Polybius" offering. [1][2]
Bracketed numbers refer to the numbered sources listed below.
People & entities involved
- Sergei PotapenkoCo-founderIndividualsEstonian co-founder of HashFlare, a cloud-mining service the DOJ called a $577M Ponzi scheme. He pleaded guilty to wire-fraud conspiracy in 2025 and was sentenced to time served (16 months), forfeiting hundreds of millions for victims.
- Ivan TurõginCo-founderIndividualsEstonian co-founder of HashFlare, a cloud-mining service the DOJ called a $577M Ponzi scheme. He pleaded guilty to wire-fraud conspiracy in 2025 and was sentenced to time served (16 months).
Sources (2)
See also
- Loci (LOCIcoin)TokensA 2017–2018 ICO for 'LOCIcoin' tied to the InnVenn IP-search platform. The SEC charged Loci and CEO John Wise with fraud for raising $7.6M on false claims about revenue, headcount, and user base; Wise also misused investor funds. Settled with a $7.6M penalty and an officer/director bar.
- Blockchain Terminal (BCT)TokensA 2017–2018 ICO (BCT tokens, ~$30M) for a 'Blockchain Terminal' — a Bloomberg-style crypto trading terminal. The SEC and DOJ said convicted ex-hedge-funder Boaz Manor secretly ran it under a fake identity ('Shaun MacDonald'), using associate Edith Pardo as a front, and lied about the product's adoption.
- Crowd Machine (CMCT)Tokens
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