An Estonian court annulled the extradition of crypto entrepreneurs, who were accused of a $575 million crypto fraud, to the U.S.
An Estonian court has annulled the extradition of two crypto entrepreneurs who were arrested in Nov. 2022 on an 18-count indictment for their alleged involvement in a $575 million crypto fraud and money laundering conspiracy.
According to Estonian newspaper Postimees, the Tallinn Circuit Court satisfied appeals on Nov. 29, 2023 saying that the Estonian government had failed to investigate and consider important circumstances in making the decision to extradite HashFlare co-founders Ivan Turogin and Sergei Potapenko.
Shortly after Turogin and Potapenko were arrested in Estonia, the U.S. Department of Justice (DoJ) issued a written request, seeking their extradition to the U.S. However, the Tallinn court ruled that the government’s orders must be annulled given there had been a “substantial breach of duty to investigate,” the report says.
As per the DoJ, Turogin and Potapenko allegedly defrauded “hundreds of thousands of victims through a multi-faceted scheme.”
“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.”
Nick Brown, U.S. Attorney for the Western District of Washington
In the indictment, the U.S. regulator wrote that the two tricked victims into buying fraudulent equipment rental contracts with a crypto mining service HashFlare and investing in a crypto bank called Polybius Bank. However, prosecutors claim the two businesses operated like Ponzi schemes. According to the DoJ, Potapenko and Turogin used shell companies to launder the fraud proceeds and to purchase real estate and luxury cars.