Two Estonians Arrested for Frauding Cryptocurrencies

In Estonia, two 37-year-old Estonians have been arrested for their involvement in a massive cryptocurrency scam. The two men, Sergei Podabenko and Ivan Durozhin, are believed to have caused $575 million in damages, according to US Justice Department reports. According to Americans, hundreds of thousands of people have been duped.

From 2015 to 2019, the two Estonians signed contracts with the suspect service Hashflare. Victims rent the company’s equipment through which digital currencies are generated (mined). Actually, that didn’t happen. Both said that Hashflare will mine a lot of crypto like Bitcoin.

But justice in America says they have no equipment for that. In fact, only one percent of the promised amount of crypto can be generated.

Victims and others from the US were urged to invest in a crypto bank called Polybius. But the company did not exist and did not pay the promised dividend. Users requesting refunds either received nothing or were paid in cryptocurrencies purchased by fraudsters and not mined. Hashflare closed its doors in 2019.

Potapenko and Turõgin used the money they earned through letterbox companies to invest in real estate, expensive cars and crypto-currencies for their own use.

U.S. officials call the scale of the case “truly surprising.” If convicted, the two Estonians face up to twenty years in prison. They are being tried in the US.