Bitcoin cloud mining platform co-founders Ivan Turogin and Sergei Potapenko successfully fought their extradition from Estonia to the US.
This follows 18 accusations of fraud and money laundering in a $575 million fraud case. Local press claimed that the Tallinn Circuit Court rejected a November 29 judgment to release the two from U.S. imprisonment.
The US Justice Department alleges that HashFlare, a Ponzi scam from 2015 to 2019, deceived hundreds of thousands of victims who deposited $575 million. The company advertised bitcoin mining hashing power leasing and bank investment. Turogin and Potapenko might serve 20 years in prison if convicted in the US.
Estonia initially granted the co-founders’ extradition in September based on a November 2022 U.S. grand jury indictment. The BBC said that Estonian officials and 15 Americans collaborated to investigate Turogin and Potapenko’s crime, making it one of the country’s largest fraud cases.
The businessmen’s defense included “evidence regarding the conditions of detention in the United States,” which the government ignored. They also claimed procedural errors in extradition orders. The circuit court vacated the extradition orders citing European Court of Justice and European Court of Human Rights precedent.
The court exonerated Turogin and Potapenko and ordered their families to receive over 100,000 euros ($110,000) in compensation. Appealing this decision is open until December 11.
This legal drama is set against Estonia’s strong financial crime policy. The government enacted the Financial Action Task Force Travel Rule in May to strengthen anti-money laundering regulations. Nearly 400 virtual asset service firms closed due to these strict rules.
Estonia’s dedication to fighting financial crimes highlights the HashFlare case’s complexity in the context of changing worldwide regulations