DOJ announces arrests in $575M crypto fraud

Nov. 22, 2022

The Justice Department announced the arrest of two Estonian citizens for their alleged involvement in a $575 million cryptocurrency fraud and money-laundering conspiracy.

Indictment: According to court documents, Sergei Potapenko and Ivan Turõgin allegedly induced victims to enter into fraudulent equipment rental contracts and caused victims to invest in a virtual currency bank called Polybius Bank. They then used shell companies to launder the fraud proceeds and to purchase real estate and luxury cars.

ICBA Position: ICBA recently told the Treasury Department that protecting national security and implementing anti-crime measures should be primary drivers of cryptocurrency policymaking and regulation. Reflecting previous ICBA calls for regulators to prioritize national security in new crypto rules, ICBA noted that bad actors still use Tornado Cash despite it being federally sanctioned.

More Resources: Earlier this year, ICBA published a series of blog posts on volatility in the stablecoin market, including the collapse of the TerraUSD stablecoin, its impact on financial markets, and how it affects community banks and the regulatory debate.