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HashFlare Founders Receive Light Sentence for $577M Ponzi Scheme
The co-founders of cloud-based cryptocurrency mining service HashFlare have been sentenced to time served, effectively receiving no additional prison time, after admitting to their roles in a massive Ponzi scheme that defrauded investors out of $577 million.
Sergei Potapenko and Ivan Turõgin were found guilty of the fraud, which ran from 2015 to 2019. The court acknowledged the severity of the crime but took into account the fact that the founders had already forfeited over $400 million in assets, which they claimed was a partial reimbursement for the victims.
As part of their sentencing, the pair were also ordered to pay a fine of $25,000 and complete 360 hours of community service during their supervised release. The Department of Justice (DOJ) is currently reviewing the case to decide whether to appeal the court’s decision.
The HashFlare scheme involved falsely reporting mining capabilities and returns, paying early investors with funds from newer customers. Between 2015 and 2019, the company accumulated over $577 million in sales from 440,000 customers. Instead of generating actual mining profits, HashFlare relied on new investments to pay out existing users.
The court’s decision has sparked debate among experts and enthusiasts alike, with some arguing that the sentence is too lenient given the scope and impact of the fraud.
Source: coincentral.com
