US Seeks 10-Year Sentences for HashFlare Founders in $577M Crypto Ponzi
US prosecutors have filed a sentencing memo in Seattle federal court urging ten-year prison terms for HashFlare co-founders Sergei Potapenko and Ivan Turogin after their 2024 guilty pleas to conspiracy to commit telecom fraud. Authorities allege the $577 million cloud-mining service was a classic crypto Ponzi scheme that defrauded roughly 440,000 customers of about $300 million. The founders argue they cooperated with investigators, served 16 months in Estonian detention and point to later cryptocurrency price gains that enabled investors to withdraw $2.3 billion, far exceeding the $487 million in initial contracts. A hearing is set for August 14 before Judge Robert Lasnik. The case underscores mounting US scrutiny of cross-border crypto mining platforms and could shape future enforcement.
Neutral
While the case highlights intensified US regulatory action against cross-border crypto mining scams, it targets a defunct service rather than a live token. Short-term market sentiment may see modest pressure on mining platform stocks or related assets due to heightened scrutiny. However, its long-term impact on major cryptocurrencies remains limited, as no specific token is involved and enforcement outcomes mainly signal clearer compliance expectations.