Two Estonian nationals have been extradited from Estonia to the U.S. to face charges for their roles in “a massive multi-faceted cryptocurrency Ponzi scheme,” according to an announcement by the U.S. Department of Justice (DOJ). Sergei Potapenko and Ivan Turõgin are accused of operating a 5 million Ponzi scheme involving the fraudulent cryptocurrency mining service […]
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US Govt Moves $90 Million in Bitcoin, ETH From Estonian Scammers
In the early US hours, Arkham Intelligence reported that the United States government had transferred over million worth of Bitcoin and Ethereum, previously seized from two Estonian nationals involved in a vast cryptocurrency fraud and money laundering scheme. This move captured the attention of the cryptocurrency community, just days after the transfer of approximately billion in Bitcoin related to the infamous Silk Road marketplace.
Arkham Intel, utilizing its advanced tracking technology, noted that just two hours ago, the US government executed multiple transactions involving the seized digital assets. These included the transfer of 0.69 BTC, worth approximately .750, and another 374 BTC, valued at around .80 million, to a newly identified Bitcoin address (3GoRwyQvAJhX3conyuq355JiBD9FyfXAQe).
Additionally, 218.5 BTC, worth .49 million, were also moved to the same address, along with 4.567K ETH, equating to .21 million. Just minutes prior to press time, another 0.0001 BTC and 0.5 BTC were moved to another new address (3LNW8R3AfDQgVCB9sQPwChyG47ktSjh3f3).
Both the Bitcoin and Ethereum addresses are new and previously unknown to Arkham, suggesting a strategic consolidation rather than an immediate liquidation of assets.
The seized funds originate from Sergei Potapenko and Ivan Turõgin, two Estonians arrested in their home country in October 2022 following an 18-count indictment by a grand jury in the Western District of Washington.
The duo was implicated in orchestrating a 5 million cryptocurrency fraud through their ventures, HashFlare, a cryptocurrency mining service, and Polybius Bank, a virtual currency bank that never existed nor returned promised dividends to investors. Their elaborate scheme not only involved fraudulent equipment rental contracts but also utilized shell companies for laundering the proceeds to acquire luxury real estate and vehicles.
In September last year, the Estonian government approved the extradition of Potapenko and Turõgin to the United States. Estonian Prime Minister Kaja Kallas revealed at that time that the decision had been made at the government level.
Today’s transactions by the US government follow a precedent set by the movement of Silk Road’s bitcoins. Notably, 2,000 BTC from the Silk Road haul were transferred to a Coinbase wallet, while the remainder were relocated to a wallet identified by Arkham as belonging to the government.
This pattern indicates a systematic approach by the US government to handling seized digital assets, focusing on consolidation before any potential future actions.
As the crypto market observed these developments, the price of Bitcoin has remained stable, hovering above ,000. The significant amount of funds involved and the government’s handling of such assets continue to be a point of interest for both investors and observers within the crypto space.
Contrary to common belief, it’s important to note that the US govt normally doesn’t sell Bitcoin or Ether at the open market. “The Silk Road US GOV coins FUD is literally just FUD. The government doesn’t slam market sell on public orderbooks. If it’s getting sold it either already or will be sold OTC/auction,” crypto analyst Byzantine General noted two days ago.
At press time, BTC traded at ,311.
Estonian Government Approves Extradition of Crypto-Fraud Accused Duo to the US, Again
The Estonian government has once again approved the extradition of the two alleged masterminds behind the Hashflare crypto mining Ponzi scheme to the United States. According to a local news report, the government has met the conditions for the men’s extradition set by the Tallinn Circuit Court.
The Estonian Ministry of Justice Has Collected Sufficient Evidence as Demanded by the Court
The Estonian government has approved the extradition of two founders of the crypto mining platform Hashflare, who are accused of operating a Ponzi scheme that fleeced 5 million from unsuspecting investors.
Ivan Turogin and Sergei Potapenko were arrested in Estonia’s capital Tallinn in November 2022, in a joint operation by the Estonian police and the U.S. Federal Bureau of Investigations (FBI). They face 18 counts of fraud and money laundering charges.
According to a Post Timees report, Tallinn Circuit Court initially blocked the attempt to extradite the duo because the Estonian government had failed to probe the conditions of the place where Turogin and Potapenko were to be held, among other things. However, the Estonian government through the Ministry of Justice has said it has gathered enough evidence as per the court ruling.
The Estonian government now believes it has satisfied the conditions set by the court, and the men’s extradition to the U.S. would be above board. Described as one of Estonia’s high-profile fraud cases, Turogin and Potapenko’s Ponzi scheme reportedly took money from hundreds of thousands of Estonian and non-Estonian investors who were promised high returns on their investments.
After their arrest, a U.S. attorney suggested that Turogin and Potapenko had used the allure of cryptocurrency mining to dupe people into investing.
What are your thoughts on this story? Let us know what you think in the comments section below.
Nearly 400 Crypto Firms Lose Their Estonian Licenses Under New Rules
The majority of crypto companies attracted by the once favorable Estonian regulations have either abandoned or lost their licenses. According to the latest numbers released by the Baltic nation’s anti-money laundering bureau, only 100 businesses are currently authorized to provide digital-asset services.
Most Estonian Licenses for Provision of Crypto-Related Services Expire
A total of 389 authorizations issued by the Estonian government to virtual-asset service providers are no longer valid, the country’s Financial Intelligence Unit (FIU) announced this week. As of May 1, 2023, there were 100 active authorizations, the bureau said on Monday.
Estonia attracted hundreds of crypto firms with its business-friendly climate before it decided to stiffen rules for the industry with amendments to the Money Laundering and Terrorist Financing Prevention Act that came into force in March 2022. These include higher capital requirements for wallet, exchange, and custody platforms.
The licenses have been canceled either by the FIU or at the request of the holders, a press release noted. “Following the entry into force of the enhanced requirements … service providers abandoned nearly 200 authorizations. In addition, the FIU revoked almost the same number of authorizations due to non-compliance,” the agency detailed.
“In renewing authorizations, we saw situations that would surprise every supervisor,” commented FIU Director Matis Mäeker. Among other issues, the unit identified persons on managerial and other positions that were not aware of having been appointed, as well as individuals with false professional resumes.
The business plans submitted by several companies were identical, the regulatory body also pointed out. Others lacked any connection to Estonia, in breach of another of the new requirements. The applications of many of these platforms were submitted by the same legal firms.
“In the applications, we found very many suspicious circumstances on various topics. This calls into question the credibility of the companies that wanted to do business here — their actual desire to provide services in Estonia or, vice versa, shows the desire of certain persons to use the Estonian economic and financial system for illegal activities,” Mäeker elaborated.
“The Financial Intelligence Unit will continue reviewing authorizations and exercising continuous supervision in the field of money laundering and terrorist financing prevention, which is the only way to identify certain deficiencies,” the bureau insisted. When Mäeker assumed his post at its helm in the summer of 2021, there were almost 650 licensed crypto-service providers in Estonia.
Do you expect more crypto companies to leave Estonia under its stricter regulations? Tell us in the comments section below.
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Estonian Enterprises Will Use the Ethereum Blockchain-Based TIME Token
From left to right: the Head of the G-Global Business Portal Denis Tsyro, the Deputy Chairman of the Eurasian Economic Club of Scientists Hanon Barabaner, Secretary-General of the Centre Party, Member of Parliament Mikhail Korb, ChronoBank Chief Executive Officer Sergei Sergienko
In the Parliament of Estonia, Mikhail Korb, a Member of Parliament and the Secretary-General of the Centre Party of Estonia held the meeting with Sergei Sergienko, the owner of the Australian project ChronoBank, Denis Tsyro, the Head of the international organization G-Global Business Portal and Hanon Barabaner, the Deputy Chairman of the Eurasian Economic Club of Scientists.
The meeting led to the signing of a cooperation agreement between the G-Global Business Portal and ChronoBank. Parties agreed on the development of joint activities in the direction of human resources management during the digitalization of the real sector of the Estonian economy.
Consulting marketplace G-Global Business Portal is an auxiliary tool for digitalizing enterprises in Estonia. Digitalization implies the transition of the economy to new formats using cryptocurrency.
ChronoBank is ready to provide an alternative to traditional financial systems – a new generation of time-based currency utilizing the latest developments in blockchain technology.
TIME token is linked to average hourly wages, is inflation-proof and have next to zero volatility. It is possible now to tokenize labor – the most tradeable resource in the real economy. Blockchain technology is the key to discovering new employment opportunities.
The use of the TIME token at enterprises will ensure a stable evaluation of the productivity of a person during working hours. The ChronoBank system can measure the real efficiency of the employee and inform the employer about the usefulness of the employee for an enterprise.
Denis Tsyro, the Head of the G-Global Business Portal platform, will integrate ChronoBank’s systems into the consulting marketplace.
The meeting was attended by Boris Berkovs, the Board Member of the TokenEst, who also expressed a desire to take part in the tokenization of enterprises of the real sector of the economy and offered his platform for ICO placement in Estonia.
After implementation of the G-Global Business Portal in Estonia, it will be scaled to other countries.
G-Global Business Portal has an agreement on the promotion of the consulting marketplace in Kazakhstan.
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