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2 Arrested for $575 MM Crypto laundering

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Two 37-year-olds were detained by Estonian police on suspicion of orchestrating a $575 million cryptocurrency money laundering fraud.

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Sergei Potapenko and Ivan Turgin are accused of luring 100 to 1000 people from all over the world to invest in their supposed bitcoin mining service. HashFlare

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Both are accused of stealing $25 million from investors in a "virtual currency" bank they claimed to have founded, named Polybius.

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According to the DOJ press release, HashFlare lacked the bitcoin mining hardware it had claimed to have.

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The criminal prosecution comes at a difficult time for cryptocurrencies and virtual currencies, when the market has seen a sharp decline and frauds are common.

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Numerous investors suffered significant losses when the massive algorithmic stablecoin TerraUSD abruptly fell.

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The two are accused of defrauding hundreds of thousands of investors and spending the proceeds on opulence.

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$10 billion in client cash were moved in secret by its creator to a related business.

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