Overview

• Sergei Potapenko and Ivan Turõgin were sentenced to 16 months in prison—matching time they have already served—and ordered to pay $25,000 fines and complete 360 hours of community service before returning to Estonia for supervised release
• U.S. District Judge Robert S. Lasnik incorporated preliminary forfeiture of more than $450 million in cryptocurrency, cash, vehicles, real estate and mining equipment seized by U.S. and international authorities
• Those assets have been earmarked for a remission process to compensate roughly 440,000 global victims of the $577 million HashFlare scheme, with distribution details to be announced by the Department of Justice
• Prosecutors described the operation as a classic Ponzi, alleging that HashFlare sold fraudulent mining contracts from 2015 to 2019, fabricated online dashboards, diverted new investor funds into personal purchases and promoted the never-operational Polybius Bank
• Acting U.S. Attorney Teal Luthy Miller said the Department of Justice is reviewing whether to appeal the light sentence after having sought 10-year terms for the founders given the scope of investor losses