The co-founders of Hashflare, a crypto mining Ponzi scheme that defrauded $577 million from a vast number of investors globally, pleaded guilty to conspiracy to commit wire fraud on Wednesday.

Sergei Potapenko and Ivan Turõgin, both aged 40, were arrested in Estonia in November 2022 and were extradited to the U.S. on an 18-count indictment. Each of them has pleaded guilty to one count of conspiracy to commit wire fraud, with a maximum penalty of 20 years in prison.

From 2015 to 2019, the duo misled Hashflare’s investors into renting portions of their purported crypto mining operations in return for a share of the cryptocurrency produced. However, court documents reveal that Hashflare possessed only a fraction of the mining equipment that it claimed—less than 1% of the computational power Potapenko and Turõgin advertised.

Victims who sought to withdraw their earnings encountered resistance, often being offered excuses or payments made with crypto acquired from the open market.

Potapenko and Turõgin’s defense asserts that no investors faced financial losses, maintaining that the only wrongdoing was misrepresenting the scale of Hashflare’s operations. The defense claimed that their businesses did provide genuine services to customers, employing nearly 100 individuals in Estonia and engaging in charitable acts.

The court revealed that they used the funds to invest in real estate and buy luxury vehicles. As part of their plea deal, Potapenko and Turõgin agreed to relinquish assets valued over $400 million to reimburse investors.

Sentencing is set for May 8 in a Seattle court.