Alleged $550M Crypto Fraudster Seeks Bail Citing Medical Concerns

News | June 19, 2024 By:

On Thursday, June 6, 2024, Sergei Potapenko filed a motion seeking bail pending his trial in the United States District Court for the Western District of Washington. Potapenko, a 39-year-old businessman from Estonia, has been charged with wire fraud and money laundering in connection with his cryptocurrency businesses.

Potapenko is accused of defrauding hundreds of thousands of investors out of more than $550 million through companies like HashFlare, Polybius, and HashCoins between 2013 and 2019. Prosecutors allege Potapenko used shell companies to siphon money for personal gain that was meant to fund crypto mining operations. However, Potapenko maintains his innocence and contends the indictment is legally and factually flawed.

In his bail motion, Potapenko argued he is not a flight risk or danger to the community. He pointed out that he was previously released on electronic monitoring in Estonia while awaiting extradition to the U.S., and fully complied with the conditions of his pre-trial release. Potapenko had even volunteered to waive extradition on two occasions if released in the U.S. The Department of Justice declined these offers.

Given his clean pre-trial conduct, Potapenko proposed stringent bail conditions if released again, including GPS monitoring, home confinement, a $5 million bond signed by family and neighbors, and daily check-ins with pre-trial services. He argued these “less restrictive means” would reasonably assure his appearance at trial.

The motion also emphasized Potapenko’s serious medical concerns. His ongoing post-operative care requires quarterly endoscopies, but the Federal Detention Center in Seatac, WA cannot adequately provide this specialized treatment. A former Bureau of Prisons doctor examined Potapenko’s case and raised “life-threatening” concerns about care in custody.

Finally, a recent Seattle Times investigation found serious deficiencies in Seatac’s medical facilities, with chronic understaffing and delayed specialist care even for less complex issues. All of these factors, the motion argued, demonstrate Potapenko should not be detained pre-trial given the risks to his health and life.

Please contact BlockTribune for access to a copy of this filing.