Estonian HashFlare Founders Mistakenly Ordered to Self-Deport Before U.S. Sentencing

Washington, D.C. — A critical misstep by U.S. immigration authorities nearly derailed a major crypto fraud case this week when Estonian nationals Sergei Potapenko and Ivan Turõgin, co-founders of the defunct mining platform HashFlare, were mistakenly ordered to self-deport — despite a court mandate requiring their presence in the United States ahead of sentencing.

Potapenko and Turõgin are at the center of one of the largest cryptocurrency-related fraud cases prosecuted by U.S. authorities to date. From 2015 to 2019, their company, HashFlare, marketed itself as a cloud mining service offering customers the chance to profit from cryptocurrency mining operations. According to the Department of Justice, the company conducted minimal actual mining, and instead used new investor funds or open-market purchases to pay out earlier participants.

In 2017, the pair launched a second venture, Polybius Bank, raising over $25 million by promoting it as a crypto-focused financial institution. The bank never materialized, and no investor dividends were issued.

After their indictment, the two men were arrested in Estonia in late 2022. Although Estonian authorities initially approved their extradition, the process was temporarily blocked by the Tallinn Circuit Court in 2023 over concerns about U.S. detention conditions. Eventually, the extradition was cleared, and the defendants were transferred to U.S. custody. They later pleaded guilty to conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering.

However, on April 11, 2025, both men received unexpected and alarming notices from the Department of Homeland Security (DHS), instructing them to leave the United States immediately. The message stated their parole was being revoked and warned of potential criminal and civil penalties if they remained.

The order directly conflicted with a federal court requirement that they remain in Washington state until their sentencing in August 2025. Legal counsel for the defendants called the DHS action “disturbing” and said it caused significant anxiety for the pair.

The Department of Justice intervened promptly, working with DHS to defer any deportation by one year — thereby preserving the timeline for sentencing. No formal comment has been issued regarding the cause of the mistake.

Potapenko and Turõgin remain in federal custody as their sentencing date approaches.