The founders of the Hashflare cloud mining service are arrested for fraud on $575 million – Bits Media

Estonian law enforcement agencies detained two founders of a closed cloud service for mining Hashflare cryptocurrencies. They are suspected of participating in a fraudulent scheme on $575 million.

Hashflare service was created in 2015 year and allowed users to rent cloud Power for cryptocurrency mining. At one time, the company could be called one of the leaders in its field, however in 2018 the year the service ceased to exist. According to the US Department of Justice, The whole company was only a "multifaceted fraudulent scheme", The funds in which "hundreds of thousands of people" lost.

The court document approves, that employees of Hashflare under the leadership of Sergei Potapenko and Ivan Turygin attracted customers and convinced them to conclude contracts for renting cloud capacities, However, this was only fraud. Also, the funds of the victims were involved in the Polybius Bank cryptocurrencies to work with cryptocurrencies.

On the criminal way the accused bought income 75 real estate objects and 6 luxury cars. They also found cryptocurrency wallets and thousands of devices for the extraction of digital assets.

“The accused took advantage of the attractiveness of cryptocurrencies for investors and a high level of opacity with cloudy mining. The scale of this pyramid was truly amazing. ", - said the prosecutor in the Western District of Washington Nick Brown (Nick Brown).

Law enforcement agencies accused the Estonians of conspiracy with the aim of fraud using electronic means, 16 episodes of fraud and 1 an episode of money laundering using fake companies and fake documents. With extradition in the United States, they may face before 20 Years of prison.

Earlier in Ukraine, the activities of a major fraudulent investment structure in cryptocurrencies were suppressed. The scheme involved more 2 000 Human.