An Estonian Circuit Court claims that it failed to conduct proper checks before approving the extradition of an alleged cryptocurrency scammer to the United States.

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

The court said the Estonian government failed to take certain circumstances into account before agreeing to extradite the suspects.

New court ruling cancels extradition approval

Ivan Turogin and Sergei Potapenko, who run a virtual currency mining company called HashFlare, had their appeal to block extradition to the U.S. approved. The Tallinn Circuit Court declared the extradition invalid because the government had not conducted an investigation and had not verified conditions at the U.S. detention facility.

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

According to the Department of Justice (DOJ), the two men allegedly got victims to 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 contracts were fake, and Polybius was not a bank and did not pay any dividends. Instead, the Justice Department said Turogin and Potapenko ran a Ponzi scheme between 2015 and 2019, defrauding "hundreds of thousands of victims."

“The size and scope of the alleged scheme is truly staggering. These defendants exploited the allure of cryptocurrencies and the mystique surrounding cryptocurrency mining to perpetrate a massive Ponzi scheme.”

In addition, the two reportedly laundered money through shell companies to purchase luxury cars and real estate.

Suspect could receive $114,000 in compensation

The U.S. government is seeking to extradite an Estonian citizen to the U.S. following the arrest of the HashFlare co-founder. However, the latest developments could prevent the transfer from happening.

"In summary, the respondent failed to take into account a number of important circumstances when assessing the proportionality of the appellant's extradition. In this way, a major error of judgment was committed, which could have led to a fundamentally wrong decision. The transferred duty of investigation and the consideration of significant circumstances cannot be performed by the administrative court instead of the executive."

Meanwhile, the Circuit Court fined the Estonian government €46,365.30 ($50,809.65) and €50,710 ($55,531) to cover Turokin and Potapenko’s costs.

In addition, the Turogin and Potapenko families will receive reimbursement of 4,080 euros (about 4,500 U.S. dollars) and 3,000 euros (about 330 U.S. dollars), respectively. The Circuit Court's decision can be appealed until December 11, 2023. #加密货币诈骗   #爱沙尼亚