HashFlare-linked wallet moved 10,600 ETH worth $18.5 million after 3.5 years of dormancy

A cryptocurrency wallet believed to be linked to the HashFlare investigation has come back to life after more than three and a half years of inactivity. On-chain data confirms that 10,600 ETH—valued at approximately $18.5 million—was withdrawn from the wallet, marking a significant financial movement as the U.S. continues its legal proceedings involving Estonian citizens Sergei Potapenko and Ivan Turõgin.

Fresh activity in the HashFlare case

Sources report that the withdrawn funds were initially split between two recipient addresses, before being moved through HiFiSwap and Near Intents platforms. Blockchain analysts noted that part of the assets began to be swapped from Ethereum to Bitcoin, an activity that on-chain researcher ZachXBT and security firm Cyvers were among the first to alert the public about.

Glossary: On-chain analysis involves tracking asset flows by reviewing publicly recorded transactions on a blockchain. Instant swap platforms are services that let users convert assets across networks or currencies quickly, without a traditional order book.

According to the published data, the transaction can be traced to address 0xff575a22975cc413771825eb84c163189a4d5d22, with the corresponding transaction ID listed as 0xd0eafd5c03b24c2f54c579745cacbffe4c6df2d19973e55d52a5f40aa1d89e0.

Inside the HashFlare operation

Launched in 2015, HashFlare operated as a cloud mining platform, selling mining contracts that promised customers a share of cryptocurrency mining revenue. Court records show the company raised more than $577 million from roughly 440,000 investors worldwide between 2015 and 2019.

However, legal filings revealed that HashFlare never had the computing power it advertised. Instead, the system reportedly operated at just about 1% of its claimed Bitcoin mining capacity, while online dashboards presented to customers showed fictitious performance data and non-existent earnings.

When investors tried to withdraw funds, the founders reportedly purchased Bitcoin from exchanges to make payments—turning the operation into a Ponzi-style fraud that used new deposits to meet previous obligations. Prosecutors also allege that Potapenko and Turõgin spent investor money on real estate, luxury cars, high-end jewelry, and private jet flights. A parallel venture by the pair, Polybius, promised a blockchain-based bank and raised at least $25 million more, but ultimately delivered neither a functioning bank nor any dividend payments.

Appeals process ongoing

In February 2025, Sergei Potapenko and Ivan Turõgin pled guilty to conspiracy to commit wire fraud. U.S. District Judge Robert S. Lasnik sentenced both to 16 months in prison—time served in pre-trial detention counted toward their sentences. Each was also fined $25,000, ordered to complete 360 hours of community service, and sentenced to three years of supervised release in Estonia.

Federal prosecutors had sought 10-year prison terms for both men. Judge Lasnik acknowledged that sentencing was complicated by extradition and transfer concerns. In late August 2025, prosecutors filed a formal appeal, arguing the punishments were too lenient. The report also notes that while victims expect full compensation from over $400 million in seized assets as part of the plea deal, the U.S. Department of Justice has yet to announce a distribution timeline.

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