Extradition Uncertain for Estonian Crypto Fraud Suspects Facing Charges in the US

Extradition Uncertain for Estonian Crypto Fraud Suspects Facing Charges in the US

An Estonian circuit court has reversed a prior decision approving the extradition of two Estonian citizens facing charges of cryptocurrency fraud and money laundering to the United States.

The court asserted that the Estonian government overlooked crucial circumstances before consenting to the extradition of Ivan Turogin and Sergei Potapenko, the operators of the virtual currency mining business HashFlare. The Tallinn Circuit Court revoked the extradition due to the government’s failure to conduct investigations or assess the conditions of the US detention facility.

Turogin and Potapenko were apprehended in Estonia in November 2022 for allegedly orchestrating a fraudulent crypto service that resulted in a $575 million loss for users.

According to the Department of Justice (DOJ), the defendants purportedly deceived victims into purchasing equipment mining contracts for HashFlare and encouraged investments in a crypto bank named Polybius, promising dividends. Investigations, however, disclosed that the mining contracts were fake, and Polybius was not a bank, failing to fulfill dividend promises. The DOJ claimed that Turoguin and Potapenko operated a Ponzi scheme, defrauding “hundreds of thousands of victims” from 2015 to 2019.

“The size and scope of the alleged scheme is truly astounding. These defendants capitalized on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi Scheme.”

Moreover, the duo allegedly laundered illicit proceeds through shell companies to acquire luxury cars and real estate. While the US government sought their extradition, the recent development may hinder the handover.

The circuit court, citing a significant error in judgment, fined the Estonian government 46,365.30 euros ($50,809.65) and allocated 50,710 euros ($55,531) for Turogin’s and Potapenko’s expenses. Additionally, reimbursements of 4,080 euros ($4,500) and 3,000 euros ($330) will be provided to Turogin’s and Potapenko’s families, respectively. The circuit court’s decision is open to appeal until December 11, 2023.


Your email address will not be published. Required fields are marked *