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Estonian men arrested over $575m crypto fraud

Estonian men arrested over $575m crypto fraud

Police have arrested two men in Estonia in connection with a $575 million cryptocurrency fraud and money laundering scheme.

Sergei Potapenko and Ivan Turõgin were picked up on an 18-count indictment returned by a grand jury in the US.

They are accused of defrauding hundreds of thousands of people, tricking them into entering into fraudulent rental contracts for crypto mining equipment and getting them to invest in a virtual currency bank that never launched.

Victims paid more than $575 million to Potapenko and Turõgin’s companies. The men then used shell companies to launder the proceeds and to purchase real estate and luxury cars, according to the indictment.

US Attorney Nick Brown for the Western District of Washington says: “These defendants capitalised on both the allure of cryptocurrency, and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme.”

The men are charged with conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering. If convicted, they each face a maximum penalty of 20 years in prison.

[Source Finextra]

Written by Jason Flair