U.S. federal prosecutors file an appeal seeking a longer sentence for the main perpetrator in the HashFlare mining fraud case

BlockBeats News, August 27, according to Decrypt, U.S. federal prosecutors have appealed to the Ninth Circuit Court of Appeals, seeking to increase the "time served" sentence for Estonian citizens Sergei Potapenko and Ivan Turõgin in the $577 million HashFlare cryptocurrency Ponzi scheme case, calling the current sentence "exceptionally lenient."

The two had previously pleaded guilty to conspiracy, having defrauded 440,000 victims worldwide between 2015 and 2019 through fake mining contracts, displaying fictitious returns on "fake dashboards," and using the funds for luxury goods and to pay early withdrawers. Previously, the judge sentenced both to only three years of supervised release and a $25,000 fine each, rejecting the prosecutors' request for a 10-year prison term due to concerns about the treatment of foreign defendants in the U.S., including possible "indefinite detention." Legal experts stated that the judge's reasoning—based on "time served, immigration risks, and restitution issues"—was sufficient, and the Ninth Circuit usually respects the discretion of district judges, making it likely the sentence will be upheld. However, the lenient sentence may weaken the deterrent effect against economic crimes. $400 million has already been forfeited for victim compensation, making this the "largest fraud case" in the Western District of Washington.