US prosecutors have appealed the time served sentences of HashFlare co-founders Sergei Potapenko and Ivan Turõgin, who were involved in a $577 million Ponzi scheme. The co-founders, extradited to the US in May 2024 after being in custody in Estonia for 16 months, were sentenced to supervised release, community service, and a fine. Prosecutors argued for a ten-year prison term, claiming the scheme caused significant harm to victims. The pair reportedly misled investors with fake dashboards while using funds from new investors to pay existing members, characteristic of a Ponzi scheme. Their lawyers contended that customers received returns exceeding their initial investments, facilitated by the rising cryptocurrency market value, and that victims would be fully compensated from forfeited assets. Blockchain crime experts pointed to increasing crypto crime rates, highlighting insufficient consequences for wrongdoing as a concern within the sector. Comparatively, other Ponzi scheme operators have faced harsher penalties in recent cases, sparking discussions about regulatory responses in the cryptocurrency realm.

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