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‘Astounding’ $575m crypto fraud yields arrests in Estonia

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Two Estonian men arrested in their nation’s capital were charged in the US with defrauding hundreds of thousands of people worldwide in a $575 million cryptocurrency fraud and money-laundering conspiracy.

Sergei Potapenko and Ivan Turogin, both 37, persuaded victims to enter into fraudulent rental contracts for crypto mining equipment and to invest in a virtual currency bank that wasn’t really a bank, the Justice Department said Monday in a statement.

In an indictment unsealed in Seattle federal court, Potapenko and Turogin were also accused of using shell companies to launder the fraud proceeds through at least 75 real estate properties, six luxury vehicles, cryptocurrency wallets and thousands of crypto mining machines.

“The size and scope of the alleged scheme is truly astounding,” said Seattle US Attorney Nick Brown. “These defendants capitalised on both the allure of cryptocurrency, and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme.”

© 2022 Bloomberg

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