the two founders of HashFlare are now in custody. HashFlare is now an unfunctional mining service for Bitcoin. Their complicity in a $575 million crypto scam plot led to their incarceration.
HashFlare Origin
In 2015, HashFlare, a cloud mining business, was established. Customers could allegedly rent the firm’s computational power through HashFlare. They mined cryptocurrency and received a proportionate share of the income. At the time, the corporation was among the industry’s top names. It later stopped operating as a miner in July 2018.
The whole mining enterprise had been a part of an enormous scam that misled many people. This is according to a statement from the US Department of Justice citing court records. Sergei Potapenko and Ivan Turgin founded it.
How Hash Flare Became Un-Operational
HashFlare revealed in July 2018 that its BTC mining services would end. They highlighted difficulties in making money in the face of shifting market conditions. The remaining annual contract costs were not refunded to customers. A charge that the customers had previously paid. The platform’s portfolio of other crypto assets usually remained operational.
The company was accused of being fake, although it was never established. The last time HashFlare made a public announcement was on August 9, 2019. They posted that they were halting the sale of ETH agreements. The reason was that the available supply had been exhausted.
HashFlare vowed to restart operations as soon as possible. It also teased additional developments. But nothing about what had transpired was ever made public. Instead, HashFlare silently vanished.
How They Scammed Individuals
The scum entailed enticing victims to sign “bogus equipment rental agreements” through HashFlare. Later on to encourage other people to deposit in a phony digital money bank named Polybius Bank.
The two are also charged with planning to use 75 properties, six premium automobiles, thousands of bitcoin mining equipment, crypto wallets, and other methods to clean their “illegal profits.”
These defendants engaged in a massive Fraud case. They used both the allure of cryptocurrencies and the mystique surrounding cryptocurrency mining.
The Founders’ Official Charges
The founders are accused of conspiring to execute wire fraud. They have been charged with 16 counts of wire fraud and one count of conspiring to launder cash. They laundered cash using fictitious firms, phony invoices, and filed agreements. The two founders could spend up to 20 years behind bars if found guilty.
The two stated that HashFlare was a “huge crypto mining business.” The corporation reportedly mined at a pace of less than 1% of what it said. Instead of receiving profits from mining operations, the business was paying out transactions by buying Bitcoin from other sources.