(AP) SEATTLE — Two men have been detained by Estonian police on suspicion of participating in a $575 million bitcoin fraud, according to U.S. officials.
Sergei Potapenko and Ivan Turogin, both 37 years old, were charged in an unrestricted indictment in U.S. District Court in Seattle with conspiracy to commit money laundering and wire fraud. The identities of the additional four defendants, who reside in Switzerland, Estonia, and Belarus, were not made public.
Authorities claim that between 2015 and 2019, the suspects deceived a large number of people into purchasing contracts for a cryptocurrency mining service called HashFlare and making investments in a virtual currency bank called Polybius Bank. Prosecutors claimed that the businesses actually functioned as pyramid schemes.In a news release, U.S. Attorney Nick Brown of Seattle stated that the defendants "capitalized on both the allure of cryptocurrencies, and the mystery surrounding cryptocurrency mining, to execute an immense Ponzi scheme."
According to Brown, Estonian and American officials are attempting to seize the defendants' possessions and bank accounts.
No information about the men's legal representation was found in Seattle court records. Authorities reported that some of the victims were in Western Washington state.
