Bitcoin Cloud Miner Founders Successfully Appeal Extradition from Estonia to the United States
Two co-founders of Bitcoin cloud miner HashFlare, Ivan Turogin and Sergei Potapenko, have successfully appealed their extradition from Estonia to the United States. The Tallinn Circuit Court overturned a lower court’s order on November 29, 2023, according to a local press report.
HashFlare, which operated from 2015 to 2019, was accused by the United States Justice Department of being a Ponzi scheme with hundreds of thousands of victims who paid a total of $575 million. The company claimed to lease hashing power for crypto mining and also encouraged investment in a fake bank. If convicted in the United States, Turogin and Potapenko each face up to 20 years in prison.
Turogin and Potapenko, who are citizens of Estonia, were arrested in their home country after a U.S. grand jury returned an indictment in November 2022. The Estonian government approved their extradition in September. The investigation of the men was carried out in Estonia with the assistance of 15 Americans and is considered one of the biggest fraud cases in the country’s history.
The businessmen’s defense presented evidence regarding the conditions of detention in the United States that the government had not considered and claimed there were procedural irregularities in issuing the extradition orders. The circuit court cited the European Court of Justice and the European Court of Human Rights practice in overturning those orders. As a result, the court ordered Turogin, Potapenko, and their families to receive over 100,000 euros ($110,000) in reimbursement. The decision can be appealed until December 11.
Estonia recently passed enhanced Anti-Money Laundering laws, which included the introduction of the Financial Action Task Force Travel Rule. As a result, nearly 400 virtual asset service providers were closed in May.