The alleged Estonian cryptocurrency fraudsters may not be extradited to the United States

The Estonian Circuit Court alleges that they failed to conduct proper checks before approving the extradition of suspected cryptocurrency scammers to the United States.

The Estonian Circuit Court reversed its previous ruling and allowed the extradition to the United States of two Estonian citizens accused of cryptocurrency fraud and money laundering.

The Court stated that the Estonian Government did not take into account certain circumstances before agreeing to the extradition of the persons involved.

New Court Ruling Cancels Extradition Approval

Ivan Turogin and Sergei Potapenko, who run a virtual currency mining company called HashFlare, have their call to block extradition to the United States has been approved. The Tallinn Circuit Court declared the extradition null and void because the government did not conduct an investigation and did not verify the status of detention facilities in the United States.

Turogin and Potapenko were arrested in Estonia in November 2022 on suspicion of operating a fraudulent crypto service that caused users to lose $575 million.

According to the Department of Justice (DOJ), the two allegedly let victims buy equipment mining contracts for HashFlare and urged them to invest in a cryptocurrency bank called Polybius, which promised to pay dividends to investors.

But the investigation revealed that the mining contract was fake, and Polybius was not a bank and did not pay any dividends. Instead, the Justice Department said Turogin and Potapenko carried out a Ponzi scheme between 2015 and 2019, defrauding “hundreds of thousands of victims.”

"The scale and scope of the alleged scheme is truly staggering. These defendants took advantage of the allure of cryptocurrencies and the mystery of cryptocurrency mining to carry out huge Ponzi schemes. ”

In addition, it was reported that the two also laundered money through shell companies to buy luxury cars and real estate.

$114,000 $114,000 in compensation for suspects**

After the arrest of the HashFlare co-founder, the U.S. government sought to extradite Estonian citizens to the United States. However, the latest developments may prevent the handover from happening.

"In summary, the respondent failed to take into account a number of important circumstances in assessing the proportionality of the appellant’s extradition. In this way, a major error of judgment is committed, which can lead to a fundamentally wrong decision. The transferred investigation obligations and the consideration of major circumstances cannot be performed by administrative courts in place of administrative organs. ”

At the same time, the Circuit Court imposed fines of €46,365.30 ($50,809.65) and €50,710 ($55,531) on the Estonian government to cover the costs of Turokin and Portapenko.

In addition, the Turogin and Potapenko families will receive reimbursement of €4,080 (about $4,500) and €3,000 (about $330), respectively. The Circuit Court’s decision can be appealed until December 11, 2023.