Nov 28, 2022 - News

Duo indicted in $575 million crypto scam

Illustration of a pair of handcuffs on 0 and 1 binary code numbers.

Illustration: Aïda Amer/Axios

🚔 Two people accused of bilking more than $575 million from thousands of victims in a cryptocurrency Ponzi scheme will face federal prosecutors in Western Washington, according to the U.S. Attorney's Office.

💰 Driving the news: The two 37-year-old men are alleged to have tricked people into buying contracts in a cryptocurrency mining service called HashFlare and investing in a virtual currency bank called Polybius Bank, according to a federal grand jury indictment unsealed last week.

  • The duo claimed HashFlare operated a massive cryptocurrency mining operation, according to the indictment.
  • Customers from around the world, including in western Washington, bought more than $550 million worth of HashFlare contracts between 2015 and 2019.
  • But HashFlare’s equipment performed Bitcoin mining at a rate of less than 1%of the computing power the defendants advertised and the Polybius Bank was never formed, federal prosecutors allege in the indictment.

What we're hearing: "The size and scope of the alleged scheme is truly astounding," said U.S Attorney Nick Brown of the Western District of Washington. "These defendants capitalized on both the allure of cryptocurrency, and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme."

⚖️ What's next: The defendants are each charged with 18 counts of conspiracy and fraud. They were arrested in the Estonian capital of Tallinn and are being held there pending extradition. They will not be assigned attorneys until their arrival in the U.S., according to the prosecutor's office.

  • People who believe they may have been victims in this case should visit for more information.

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