HashFlare is a cloud mining company that was founded in 2015 and allows customers to lease the company's hashing power. Therefore, users have the ability to mine digital currencies and get a share of the profits generated.
During that time, the company was one of the leading enterprises in the world. In spite of this, the business suspended all mining activities in July of 2018.
The entire mining business was allegedly a part of a larger crypto fraud scam, as stated by the Department of Justice (DoJ) of the United States of America. Ivan Turgin and Sergei Potapenko were responsible for defrauding hundreds of investors through the organization that they ran.
They duped their victims into investing in a bogus equipment leasing scheme for cryptocurrency mining. Additionally, they were successful in convincing other customers to put money into Polybius Bank. It has come to light that Polybius Bank is a front for a fraudulent cryptocurrency institution.
In addition to this, it is believed that the scheme's creators engaged in illegal money laundering activities using a variety of methods. For instance, they purchased over six luxury automobiles, seventy-five different homes, and multiple cryptocurrency mining devices.
The statement also disclosed that they had dispersed the earnings of their illicit activity over a number of other cryptocurrency wallets. The United States Attorney for the District of Columbia, Nick Brown, stated that the magnitude of the plan is "astounding."
According to Brown's statement, "the defendants carried out a massive Ponzi scheme by taking advantage of the allure of the cryptocurrency industry and cryptocurrency mining."
Reports indicate that both of the company's founders are facing 16 counts of wire fraud and one count of conspiracy to commit wire fraud. In addition to that, it is alleged that they engaged in money laundering by means of phony contracts, invoices, and shell businesses.
The Case Is Being Investigated By The FBI In The US
Both of the company's founders may potentially spend about 20 years in prison if they are found guilty of the charges brought against them. HashCoins OU, the company that is now the parent of HashFlares, was established in 2013 by Turgin and Potapenko.
HashFlare initially started providing cryptocurrency mining services in the year 2015. In the beginning, the firm only offered contracts for Bitcoin, but later on, they added choices for ZCASH, DASH, and ETHASH as well.
HashFlare temporarily suspended its Bitcoin mining services in July of 2018. The firm stated that this decision was made due to difficulties in producing money as well as volatility in the market.
In the meantime, the mining company issued its most recent public statement on August 9th of this year. Following that, the firm made the announcement that it will stop selling ETH contracts.
The information in the post indicated that the firm had reached its full sales potential. However, the mining company assured customers that it will quickly go back to business as usual.
However, there was not a lot of information available to explain why HashFlare had shut down. The Federal Bureau of Investigation (FBI) is currently looking into the circumstances surrounding the incident. Additionally, the agency is gathering information from users who fell prey to fraudulent schemes carried out by Polybius, HashCoins OU, and HashFlare.
