Judicial Order vs. Immigration Misstep
The defense team expressed concerns over what they describe as a bureaucratic error, referencing the recent mistaken deportation of another individual to an El Salvador prison.
“Although we do not doubt the sincerity of the prosecution team in working to resolve the issue, we are concerned,” the attorneys wrote. “It would be unfathomable for Ivan and Sergei to be approached and detained in front of their visiting families.”
If the matter is not resolved within days, the attorneys said they will request a court hearing and ask DHS representatives to attend. Both defendants plan to request time served and permission to return to Estonia following sentencing.
Crypto Entrepreneurs or Fraud Architects?
Federal prosecutors allege that Potapenko and Turogin misled investors over a seven-year period through a fraudulent cloud-based crypto mining scheme called HashFlare. Customers were offered contracts to rent mining equipment and promised returns funneled through a so-called digital bank, Polybius, which the government says never existed.
In reality, HashFlare did not own functional mining equipment, and investors were allegedly paid back using purchased, not mined, cryptocurrency—a classic Ponzi structure, prosecutors claim.
However, defense attorneys maintain that the men built legitimate businesses and caused no actual financial losses.
“Sergei is committed to complying with all court conditions,” said his attorney Mark E. Bini of Reed Smith LLP. “We believe the sentencing hearing will show Sergei and his partner are crypto innovators… and that he should be allowed to return home to reunite with his family.”
Turogin’s counsel, Andrey Spektor of Norton Rose Fulbright LLP, voiced similar sentiments, saying his client followed all rules “despite the position DHS has put him in.”
