HashFlare Ponzi Founders Get Time Served for $577M Crypto Scheme, Escape Additional Jail

Key Points

1. Sergei Potapenko and Ivan Turõgin were sentenced to 16 months, matching their time already served, and ordered to pay $25,000 fines each, with over $450 million in assets forfeited for victim compensation.

2. The HashFlare scheme involved fake online dashboards and a fictitious virtual currency bank, Polybius Bank, defrauding hundreds of thousands of investors globally between 2015 and 2023.

3. The defendants pleaded guilty to conspiracy to commit wire fraud in February 2024, agreeing to forfeit over $400 million in assets while facing a maximum 20-year sentence.

4. The lenient sentences contrast with harsher penalties in other crypto fraud cases, such as Nicholas Truglia's 12-year sentence for a $22 million scheme and Shane Moore's 30-month sentence for a $900,000 fraud.

5. The Justice Department is considering an appeal, indicating dissatisfaction with the relatively light sentences given the scale of the fraud.