Two citizens of Estonia have been charged with running a trio of cryptocurrency-related scams which defrauded people of $575 million.

Sergei Potapenko and Ivan Turogin, both 37 and from Tallinn, founded HashCoins in 2013 as a manufacturer of cryptocurrency mining equipment but did not fulfil orders which had been paid for in full.

In 2015 they set up HashFlare, which claimed to convert the orders for equipment to “remote mining services” and, should the ‘clients’ send funds, promised to give them a share of the profits.

Prosecutors said they mined less than 1% of the total mining hashrate sold to customers, showed them fraudulent crypto balances and prevented them from cashing out.

Polybius Bank, a third venture, raised $25m from investors around the world via a 2017 Initial Coin Offering but didn’t come to anything. HashFlare officially closed down in August 2019.

Arrested in Tallinn on November 20th, Potapenko and Turogin have been charged in Washington State, USA with one count each of conspiracy to commit wire fraud, 16 counts each of wire fraud and one count each of conspiracy to commit money laundering. Prosecutors have requested a jury trial.

Nick Brown, attorney for the Western District of Washington, called the size and scope of the alleged scheme “truly astounding”.

“These defendants capitalised on both the allure of cryptocurrency and the mystery surrounding cryptocurrency mining, to commit an enormous Ponzi scheme,” he said.

Cardano builder funds $4.5m research hub in Scotland

Input Output Global, the main developers behind the Cardano blockchain, have funded a $4.5 million research hub at the University of Edinburgh.

The hub is described as a collaboration between the University of Edinburgh and IOG to deepen the well of scientific knowledge and set new standards for research within the blockchain and distributed ledger industry. 

It will allow university students and researchers to propose new projects for the technology, driving greater industry-wide focus on fundamental research and allowing researchers who work outside of the technology to explore its capabilities more easily.

It will be led by a steering committee, featuring both IOG and university representatives, which will review project proposals and allocate funding. 

The company previously established a blockchain technology lab within the School of Informatics. 

Cryptocurrency shorts

Input Output CEO Charles Hoskinson says cryptocurrency needs strong governance following the collapse of exchange FTX to take the human element out of a protocol’s day-to-day operations. “Crypto didn’t fail. No cryptocurrencies went down. No blockchain suddenly stopped making blocks. No DEX stopped trading. Humans yet again proved humans are bad at being honest, credible and moral.”

FTX owes its 50 biggest creditors nearly $3.1bn, according to a filing in a US bankruptcy court.

Shares of US-based cryptocurrency exchange Coinbase have hit their lowest price since the company went public in April 2021.

Migu and Douyin – a subsidiary of China Mobile and China’s version of TikTok respectively – are showing the Qatar World Cup in the Metaverse.

Crypto prices

The overall market cap of the 21,800 coins is at $780 billion at the time of writing (7am UK), a 2.5% decrease in the last 24 hours.

For round-ups of recent cryptocurrency news developments, click here.

For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.