Two of the founders of HashFlare, a Bitcoin cloud mining service that is no longer active, have been arrested in Estonia on suspicion of being involved in a crypto fraud scheme with a potential loss of $575 million. The conspiracy was allegedly perpetrated by a third party.

The year 2015 saw the start of business for the company now known as HashFlare, which is a cloud mining company. Clients can rent the company’s hashing power to mine bitcoins and earn a percentage of the revenue generated by the company, according to the company’s website, which states that clients have the option to do so.

At the time, the company was generally recognized as one of the largest players in the business. However, in July 2018, it halted a substantial part of its mining efforts, leading to widespread speculation that it may have been planning to exit the market.

However, the entire mining operation, led by the company’s founders Sergei Potapenko and Ivan Turõgin, was part of a “multifaceted scheme” that “swindled hundreds of thousands of victims”, as stated in a statement issued by the United Nations. United States Department of Justice and citing court documents. According to this statement, the mining operation was part of a “multifaceted scheme” that “swindled hundreds of thousands of victims.”

It is also alleged that the two conspired together to hide their “criminal gains”. through the use of 75 residences, six luxury vehicles, cryptocurrency wallets and hundreds of cryptocurrency mining equipment. Both have been accused of doing this.

“These defendants capitalized on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining to commit a massive Ponzi scheme,” he has been quoted as saying.

They have been charged with conspiracy to carry out wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering using fictitious businesses and false invoices and contracts. The HashFlare founders are the ones facing these charges. If found guilty, the creators of HashFlare can be sentenced to up to twenty years in jail.

HashCoins OU, the company that is now HashFlare’s parent company, was created in 2013 and HashFlare’s mining services first became accessible in 2015. Potapenko and Turõgin are responsible for establishing these two businesses.

HashFlare announced that it will stop providing Bitcoin mining services in July 2018, citing difficulties in making a profit due to market volatility as the main reason for the decision.

As part of the investigation now being conducted by the FBI, customers who signed up for what the FBI believes are fraudulent operations by HashFlare, HashCoins OU, and Polybius are being contacted for information on them.