From 2015 to 2019, Sergei Potapenko and Ivan Turygin promoted their Hashflare cloud mining service, which was launched by their Hashcoins OU company. The platform offered critic-investors five different types of mining contracts: Sha-256 (Bitcoin), Ethash (ether), Scrypt, Dash and Zcash.
According to the investigation, Hashflare did not have the necessary computing power to perform the vast majority of mining contracts, and its management web-panel, which allegedly showed the clients their profit from mining, reflected falsified data.
To maintain the illusion of the extraction of digital currencies, the organizers of the fake mining platform bought crypto assets from the third party, then to distribute them among the victims that requested the withdrawal of funds from their Hashflare account.
In addition, in 2017, scammers raised about $ 31 million for the implementation of the project to create a digital bank. However, instead, most of the proceeds were used to buy real estate, luxurious cars and personal investment activities.
According to the prosecutor’s office, the activities of Potapenko and Turygina brought to investors losses in the amount of about $ 577 million. The accused pleaded guilty to conspiracy to make electronic fraud. Everyone faces the maximum punishment in the form of 20 years of imprisonment. The verdict must be passed on May 8.
Earlier, the US Securities and Exchange Commission (SEC) was accused of Novatech’s management of the creation of a cryptocurrency pyramid. The victims of the scheme were more than 200,000 investors, and losses exceeded $ 650 million.
Source: Bits
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