The founder of the cloud mining company HashFlare has been arrested on suspicion of fraud, with the amount involved reaching 575 million dollars

ChainCatcher news, according to Cointelegraph, two founders of the now-defunct cloud mining company Hashflare have been arrested in Estonia, accused of involvement in cryptocurrency fraud and money laundering, with an amount involved reaching $575 million. It is reported that HashFlare was established in 2015, claiming to allow customers to lease the company's hash power to mine cryptocurrencies and receive a proportional share of the profits. In July 2018, Hashflare announced that it was forced to terminate all Bitcoin mining contracts due to unprofitability.

According to a statement from the U.S. Department of Justice citing court documents, the mining operations run by Hashflare founders Sergei Potapenko and Ivan Turõgin "defrauded hundreds of thousands of victims," including persuading victims to sign "fraudulent equipment leasing contracts" through HashFlare, as well as convincing other victims to invest in a fake virtual currency bank called Polybius bank. (Cointelegraph)