Skip to content Skip to sidebar Skip to footer

The crypto industry has seen massive growth in recent years. And since mainstream adoption has accelerated, cybercriminals and scammers have also stepped up their efforts to trick innocent users into crypto. As a result, the global law enforcement industry has also stepped up to tackle the bad actors of money laundering.

This time, the Estonian police made headlines by arresting two crypto fraudsters who defrauded investors of $575 million. The defendants, Ivan Turõgin and Sergei Potapenko, are both 37 years old. They simulated running a cryptocurrency mining platform, HashFlare, and a digital asset bank named Polybius Bank, where victims invested in both crypto and fiat currencies.

A Seattle District Court laid charges against the defendants, including 16 indictments of wire fraud and one of money laundering using bogus companies. Moreover, investigations revealed that this crypto scam also involved four other conspirators living in Belarus, Switzerland and Estonia. Fraudsters received illegal crypto funds from hundreds of thousands of users and operated fake business models from 2015 to 2019; officials claimed the company was acting like a pyramid scheme.

Bitcoin is currently trading above $16,500. | Source: BTCUSD price chart from

US authorities continue to remove scammers

According to the report, the arrest of the fraudsters resulted from a joint search by more than 100 Estonian police officers and about 15 FBI agents. According to the US Department of Justice (DOJ), the scammers used stolen funds to buy real estate and luxury cars and used shell companies to launder money.

Speaking about the incident, Nick Brown, a US attorney for the Western District Court, added;

The size and scope of the alleged scheme is truly staggering. These defendants capitalized on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining to commit a massive Ponzi scheme. They lured investors with false representations, then paid early investors with the money of those who invested later. They tried to hide their ill-gotten gain in Estonian properties, luxury cars, bank accounts and virtual currency wallets around the world. US and Estonian authorities are working to seize and retain these assets and profit from these crimes.

Prosecutors say the criminals, currently in custody, could face prison terms of up to 20 years. A federal district court will convict the defendants based on the US Sentencing Guideline after they confess to the crimes committed.

The US DOJ confiscated over 50,000 bitcoins last year

The US DOJ recorded the historic seizure of over 50,000 Bitcoin in the same month last year. At the time of the confiscation, Bitcoin was trading at a high price of around $68,000, meaning the confiscated crypto stash was worth over $3.3 billion. James Zhong, whose BTC was seized, allegedly committed scams on the Silk Road darknet market.

U.S. Attorney for the Southern District Court, Damian Williams, commented at the time;

James Zhong committed wire fraud over a decade ago when he stole around 50,000 Bitcoins from Silk Road. For nearly a decade, the whereabouts of this massive missing piece of Bitcoin had become a $3.3 billion+ mystery.

Featured image from Pixabay and chart from

Source link

Leave a comment