Potapenko and Turõgin, co-founders of the now-defunct cryptocurrency mining platform HashFlare, were sentenced in connection with a $577 million Ponzi scheme, but will not be serving additional time in prison.
The two had already been serving 16 months of custody since their arrest in Estonia in November of 2022 and had been extradited to the United States in May of 2024.
In Seattle, on Tuesday, federal Judge Robert Lasnik sentenced them to time served, a $25,000 fine, and ordered them to undergo 360 hours of community service, to be completed under the supervision of release in their home country of Estonia.
The Department of Justice (DOJ) is considering appealing the sentence after prosecutors had sought a 10-year term.
Largest Fraud Case in Seattle’s History Raises Sentencing Debate
The case was considered by Seattle prosecutors to be the largest fraud ever pursued.
Between 2015 and 2019, HashFlare enticed more than 440,000 clients by selling cloud-based cryptocurrency mining contracts.
Prosecutors had claimed that the company fabricated performance reports, showing false mining capacity and income on investors’ dashboards while using new customer funds to pay earlier investors, a hallmark of Ponzi schemes.
US Acting Attorney Teal Luthy Miller characterized it as “a mirage of cryptocurrency mining” while indicating that the defendants spent millions of dollars on Bitcoin purchases, luxury real estate, among other expensive items.
Also Read: South Korean Crypto Exchange Bitsonic CEO Sentenced to Second Prison Term Following Major Fraud Case
Judge Points out Asset Forfeitures and Withdrawals as Significant Factors
Despite the scale of the scam, Judge Lasnik was apparently persuaded by the defence that numerous customers had already redeemed their investments.
Under a plea deal in February 2025, Potapenko and Turõgin consented to forfeiting assets in excess of $400 million.
The defence also cited papers showing that 390,000 investors who had $487 million invested in HashFlare mining contracts had withdrawn approximately $2.3 billion over time. This, the defence argued, resulted in net losses being less than initially thought, which influenced the court to give a lighter sentence.
Also Read: AML Bitcoin Founder Rowland Marcus Andrade Sentenced To 7 Years For $10 M Fraud
Immigration Ambiguity Preceded Sentencing
An interesting immigration twist also made the sentencing process complex.
In April, UnoCrypto reported that despite being issued a court order to remain in the United States, Potapenko and Turõgin were sent a letter by the Department of Homeland Security instructing them to “deport immediately.”
Their lawyers were notified in confusion, and the co-founders had once more made their desire to return to Estonia clear.
With the ruling now in effect from the court, they can be compelled to serve their supervised release there, fulfilling their community service obligations while again in their native country.
Also Read: China’s Kuaishou Employees Sentenced for $20 Million Embezzlement and Crypto Laundering
Other High-Profile Crypto Crime Sentences of 2025
This sentencing adds to an increasingly long list of high-profile crypto-related convictions this year.
On January 31, UnoCrypto reported that the British court sentenced seven gang members for the kidnapping and torture of a victim with a view to extorting cryptocurrency worth $124,000.
Also, on April 14, we reported that a Chinese court sentenced nine scammers who have orchestrated a $6 million USDT scam on more than 66,800 Indian victims.
These crypto scams were carried out through spurious romantic relationships and investment plans on pretend platforms to five to fifteen years of imprisonment.
The collective cases illustrate both the scale and dynamic nature of cryptocurrency-driven crime around the world and also illustrate the intricacies of legal cases in handling cross-border financial fraud.