Sergei Potapenko and Ivan Turõgin, the co-founders of Hashflare, a crypto mining Ponzi scheme, pleaded guilty to conspiracy to commit wire fraud, resulting in a loss of $577 million for investors worldwide. They face a maximum prison sentence of 20 years. The men, both from Estonia and arrested in November 2022, were indicted on 18 charges before being extradited to the U.S. Hashflare misled investors between 2015 and 2019, offering them the opportunity to rent a portion of its purportedly vast crypto mining operations. However, court documents reveal that the company operated with less than 1% of the mining power it claimed. When investors sought their earnings, prosecutors argue that Potapenko and Turõgin either resisted payments or reimbursed them with cryptocurrency acquired elsewhere. Their legal representatives have stated that no actual financial harm was caused to the investors, framing the case as a matter of misrepresentation rather than fraud. The guilty pleas follow the extensive fallout from one of the largest scams in the cryptocurrency space, highlighting ongoing concerns about investor protection in this rapidly evolving market.

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