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HashFlare Wallet Moves $18.5M in ETH After 3.5 Years
A wallet linked to the $577M HashFlare crypto Ponzi scheme transferred 10,600 ETH. Prosecutors are appealing the founders' sentence as too lenient.
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A cryptocurrency wallet linked to Sergei Potapenko and Ivan Turõgin's $577 million HashFlare fraud stirred after more than three years. On-chain investigator ZachXBT flagged the transfer of 10,600 Ether, worth roughly $18.5 million. Security firm Cyvers confirmed the activity.
The address at 0xff575a22975cc413771825eb84c163189a4d5d22 sent the tokens to two recipient wallets. From there, the funds moved through instant exchange platforms HiFiSwap and Near Intents. Investigators said the entity behind the wallet began converting the Ethereum into Bitcoin. The transaction hash is 0xd0eafd5c03b24c2f54c579745cacbffe4c6df2d19973e55d52a5f40aa1d89e0.
HashFlare launched in 2015 as a cloud mining platform. It sold contracts promising a share of crypto mining profits. Between 2015 and 2019, the scheme collected more than $577 million from roughly 440,000 investors worldwide. Court filings later showed HashFlare operated at about 1% of the Bitcoin mining capacity it claimed. Instead of mining, the company showed customers fake dashboards with fabricated performance data. When investors asked to withdraw money, the founders bought Bitcoin on exchanges to pay them – a structure court documents describe as a classic Ponzi scheme.
Potapenko and Turõgin used investor funds to buy real estate, luxury cars, jewelry, and chartered private jet trips. Acting U.S. Attorney Teal Luthy Miller called it "a mirage of cryptocurrency mining." The pair also raised at least $25 million through a separate venture called Polybius, pitched as a blockchain-based bank. No bank was ever created, and no dividends were paid.
Both men pleaded guilty in February 2025 to conspiracy to commit wire fraud. U.S. District Judge Robert S. Lasnik sentenced them to 16 months in prison, which they had already served in custody. Each received a $25,000 fine, 360 hours of community service, and three years of supervised release in Estonia. Prosecutors had asked for 10-year prison terms.
Judge Lasnik called it a "difficult sentencing" because of concerns about treaty transfer logistics. He warned that without an approved transfer to Estonia, the defendants would face a harsher prison term than comparable American white-collar offenders, followed by indefinite immigration detention before deportation. Federal prosecutors filed a notice of appeal in late August 2025, challenging the sentence as too lenient.