The Estonian government has granted approval for the extradition of two individuals linked to the $575 million cryptocurrency Ponzi scheme known as HashFlare, despite a previous block by the Tallinn court. Ivan Turogin and Sergei Potapenko, both arrested in Estonia in November 2022, are now set to face fraud charges in the United States.
Overruling court decision
This decision comes in contrast to the Tallinn Circuit Court’s block in November 2023, where the court criticized the Estonian government for not thoroughly investigating critical circumstances surrounding the extradition request. The U.S. authorities accuse Turogin and Potapenko of laundering $575 million of clients’ funds, which were allegedly used for purchasing real estate and luxury cars.
Following a comprehensive review, Estonia’s Ministry of Justice has concluded that sufficient evidence has been gathered to support the extradition without disproportionately infringing on the fundamental rights of the accused individuals. However, the exact timeline for their extradition to the United States remains unclear.
The allegations
Turogin and Potapenko are accused of deceiving victims into signing fraudulent equipment rental contracts with the crypto mining service provider HashFlare and investing in a cryptocurrency bank called Polybius Bank. Prosecutors assert that both businesses operated as Ponzi schemes, with the duo allegedly using shell companies to launder the $575 million in clients’ money.
In summary, Estonia’s decision to approve the extradition of Ivan Turogin and Sergei Potapenko to the United States signifies a significant development in the case involving the $575 million HashFlare Ponzi scheme. Despite previous legal hurdles, the Estonian government’s determination to extradite the individuals underscores the gravity of the allegations and the commitment to ensure justice is served.