The Estonian government allows the extradition of Hashflaar accused

Ivan Turogin and Sergey Potapenko, co-founders of the inactive Bitcoin (BTC) cloud miner HashFlare, are to be extradited from Estonia to the United States. The extradition of the Estonian nationals was halted by an appeals court in November, but the Estonian government has met the necessary conditions for its continuation.

Turojin and Potapenko are charged in the United States with 18 felony counts of money laundering and conspiracy, and face up to 20 years in prison each. His company was once a leading cloud miner but was allegedly run by a Ponzi scheme.

Turojin and Potapenko were arrested in Estonia in November 2022 following a large-scale investigation involving US and Estonian law enforcement.

The Estonian government approved the extradition of Turojin and Potapenko in September, but they successfully appealed the decision in November. The High Court ordered Turojin and Potapenko to receive monetary compensation instead.

Now, the Estonian government has gathered evidence on US detention conditions, which “can prove that the violation of the fundamental rights of the individuals by extradition is disproportionate,” local news publication Postimees reports.

Dear users! We would like to inform you that today on 08.08.2019 we have discontinued the sale of ETHash contract.

— HashFlare (@hashflare) August 8, 2019

HashFlare was launched in 2015. It took in $575 million before collapsing in 2019. It has been facing problems since last year, when some of its miners were shut down due to lack of income from them.

Related: HashFlare's Exit and the Future of Cloud Mining

The US Department of Justice (DOJ) alleged that Turojin and Potpenko “provided a contract in which clients would be paid a percentage of the virtual currency produced by the operation to lease Hashflare's mining operations.” HashFlare didn't have the equipment or even 1% of the computing power it requested, however. The DOJ continued:

“When investors ask to withdraw the money they got from mining […] The defendants either contested the fee or paid the investors using virtual currency that the defendants bought on the open market – not the money they mined.

The DOJ said the scam had “hundreds of thousands” of victims. The US Federal Bureau of Investigation is still looking for victims.

Turojin and Potapenko are accused of raising $25 million from investors to set up a digital bank called Polybius. They didn't follow through on their plan.

Magazine: Here's how to keep your crypto safe