Estonia, US Arrest 2 Suspects in $575 Million Crypto Fraud Scheme
Law enforcement officers from Estonia and the United States have arrested two men for allegedly committing a large-scale cryptocurrency fraud. The Estonian nationals, who ran a crypto mining service and a fake virtual currency bank, laundered their proceeds, spent on cars and real estate, and donated to a politician. Estonian Police, FBI Detain 2 Crypto Fraudsters in Joint Operation
Two Estonian citizens, suspected of fraud involving cryptocurrency and money laundering, have been arrested by the Estonian National Criminal Police and the U.S. Federal Bureau of Investigation (FBI). The United States is now seeking their extradition.
Sergei Potapenko and Ivan Turõgin, both 37, have been accused of defrauding hundreds of thousands of people, the Estonian state broadcaster Eesti Rahvusringhääling (ERR) reported. They were detained as a result of a joint investigation on Sunday, Nov. 20.
Some of the victims were persuaded to enter into fraudulent equipment rental contracts with their mining service called Hashflare. Others invested in Polybius Bank, a virtual currency bank which was never a bank and did not pay out the promised dividends.
According to an announcement by the U.S. Department of Justice, investors paid over $575 million to the platforms set up by the pair, who then laundered their proceeds through shell companies and used some of the money to buy properties in Estonia and luxury cars.
Potapenko and Turõgin tried to hide the rest of the money in bank accounts and cryptocurrency wallets around the world. U.S. and Estonian authorities are working to seize and restrain these assets, said U.S. Attorney Nick Brown for the Western District of Washington, who also emphasized: The size and scope of the alleged scheme is truly astounding. These defendants capitalized on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme. Crypto Scheme Described as One of the Largest Frauds in Estonia
The Estonian police and the FBI collaborated closely, with 100 police officers, including over a dozen federal agents from the United States, involved in the investigation, which the head of the Cybercrime Bureau of Estonia’s National Criminal Police Oskar Gross called “long and vast.” Quoted by ERR, he stated: The sheer volume of this investigation is described by the fact that this is one of the largest fraud cases we’ve ever had in Estonia.
“Technology has broadened the risk of fraud and before trusting one’s money to a venture or a person, an in-depth gathering of background information should be conducted,” commented State Prosecutor Vahur Verte, who warned people to look after their money.
On Tuesday, the local media also revealed that Potapenko and Turõgin were among the biggest donors of Estonian politician and lawmaker Raimond Kaljulaid during his campaign for a seat in the European Parliament in 2019. Kaljulaid, who received €12,500 from them, claims he learned of their involvement only this week.
“There are many legitimate ways to turn cryptocurrencies into business, but choosing a shortcut through deception or opaqueness is not a way to go about the venture,” Oskar Gross insisted. The case is not the first crypto-related crime in Estonia, ERR noted in its report. In October, the Estonian police arrested suspects linked to the Dagcoin crypto investment fraud. Tags in this story arrests, Bank, criminal police, Crypto, Crypto Fraud, Cryptocurrencies, Cryptocurrency, department of justice, DOJ, Estonia, estonian, extradition, FBI, Fraud, Investigation, Ivan Turõgin, Law Enforcement, mining, Police, Sergei Potapenko, U.S., United States, US
Do you expect more arrests in the case of the crypto fraud scheme in Estonia? Tell us in the comments section below. Lubomir Tassev
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration. Kraken"s Jesse Powell Takes Aim at Newly Launched Proof-of-Reserve Lists, POR Audit "Requires Cryptographic Proof" NEWS | 3 hours ago Bankruptcy Lawyers Say FTX Was Operated by "Inexperienced and Unsophisticated Individuals" NEWS | 6 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleBinance and Paxos’s BUSD: High Quality Reserves, Audits, and Regulation Next articleBitcoin, Ethereum Technical Analysis: Bitcoin Rebounds, Coinbase Confirms Holding 2 Million BTC Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year
The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.SEC Risks Violating Admin Procedure Act by Rejecting Spot Bitcoin ETFs, Says Grayscale Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Iran to Increase Penalties for Unauthorized Cryptocurrency Mining