The transfer adds scrutiny to the $577 million fraud case as U.S. prosecutors appeal what they call an overly lenient sentence for HashFlare's co-founders.
A wallet tied to Sergei Potapenko and Ivan Turõgin's HashFlare fraud moved 10,600 ETH worth about $18.5 million after roughly 3.5 years of inactivity, adding a new development to a case in which federal prosecutors are seeking longer prison terms for the Estonian founders. ZachXBT flagged the transfers and Cyvers helped identify the activity, which sent the funds to two addresses before they began moving through HiFiSwap and Near Intents as the entity started converting Ethereum to Bitcoin. HashFlare, a cloud mining platform launched in 2015, collected more than $577 million from about 440,000 investors between 2015 and 2019 while operating at about 1% of the Bitcoin mining capacity it claimed, according to court filings, and used fabricated dashboard data to misrepresent returns. Potapenko and Turõgin pleaded guilty in February 2025 to conspiracy to commit wire fraud and were later sentenced by U.S. District Judge Robert S. Lasnik to 16 months in prison, time they had already served, along with fines, community service and supervised release in Estonia. Prosecutors filed a notice of appeal in late August 2025, arguing the sentence was too lenient, while victims are set to be compensated from more than $400 million in forfeited assets though the DOJ has not announced a distribution timeline.