Ivan Turogin and Sergei Potapenko, the co-founders of Bitcoin cloud mining platform HashFlare, have successfully challenged their extradition to the United States from Estonia. The Tallinn Circuit Court reversed the prior court's decision on November 29, as reported by local media.
The U.S. Department of Justice accused HashFlare, operating from 2015 to 2019, of being a Ponzi scheme that defrauded hundreds of thousands of victims, amassing a total of $575 million. The company purportedly offered hash power leases for cryptocurrency mining and promoted investments in a fictitious bank. Turokin and Potapenko could face up to 20 years in prison if convicted in the United States.
Both individuals, who are Estonian citizens, were apprehended in Estonia in November 2022 following an indictment from a U.S. grand jury. Although the Estonian government initially sanctioned their extradition in September, the Tallinn Circuit Court's recent decision overturned this ruling. The investigation, conducted in collaboration with 15 Americans, represents one of the largest fraud cases in Estonia's history, as reported by the BBC. The defense presented evidence regarding the conditions of detention in the U.S., which the government allegedly failed to consider. They also highlighted procedural irregularities in the issuance of the extradition warrants. Citing the practices of the European Court of Justice and the European Court of Human Rights, the Circuit Court overturned the orders.
Moreover, the court has instructed that Turokin, Potapenko, and their families receive compensation exceeding 100,000 euros ($110,000). An appeal against this decision can be lodged until December 11.
Estonia reinforced its anti-money laundering laws, including the adoption of the Financial Action Task Force's travel rules, resulting in the closure of nearly 400 virtual asset service providers in May.
