US jails Estonian crypto fraudsters

The U.S. Department of Justice announced that Estonians Sergei Potapenko and Ivan Turogin have been imposed a 16-month prison sentence over their involvement in a cryptocurrency investment scam that pilfered $577 million, reports The Record, a news site by cybersecurity firm Recorded Future. After failing to provide buyers with cryptomining equipment services promised by its HashCoins company in 2013, both Potapenko and Turogin opted to promote remote mining services that would grant a percentage of profits via the HashFlare pooled mining operation which only had 1% of the necessary computational power for bitcoin mining and 3% of the bandwidth for altcoin mining preventing investors from cashing out their investment, according to court documents. More than $450 million in assets have also been sequestered from the Estonians, with the amount to be allocated as compensation to some of the victims around the world. Both Potapenko and Turogin will be on supervised release in Estonia after having already been imprisoned for 16 months. Such a sentence is expected to be appealed by the Justice Department following prosecutors' argument for a decade-long imprisonment.