HashFlare Cloud Mining: My Experience and How It All Ended
In August 2015, when bitcoin was still $260 a coin, I read on a blog that the author had bought some mining power from HashFlare and was waiting for Bitcoin to grow.
After thinking about it for a week, I decided to give it a try: I really regret missing the chance to mine bitcoin back in 2011, when a friend first told me about it.
In short, how it all ended: HashFlare shut down in 2019, and in 2025 its founders admitted in a US court that it was a Ponzi scheme. Details are at the end of this post.
I took a discounted SHA-256 and Scrypt bundle: there was a summer promotion, and buying a bundle was a good deal.
Scrypt wasn’t as profitable, but I took it too for variety. A bit later the Litecoin block reward was cut in half, and the Scrypt package became completely unprofitable. SHA-256, on the other hand, kept bringing in satoshis.
Then bitcoin started to fall, sliding from $260 to $213. I got a little upset and decided not to write this post yet, but to wait and see. I still believed that bitcoin was the gold of the crypto world and was bound to go up. The idea was to save up 1 BTC and sell the rest as the price rose.
Of course, I checked reviews of HashFlare, their terms and so on. Everything looked quite real: photos of the data center and hardware (miners, power supplies and more), an office in Estonia, a website in several languages, a not-so-cheap SSL certificate.
HashFlare terms and features
I liked that the mining power was rented for life :-) and that all those machines weren’t humming at home and needed no maintenance. For that, a small share of the mined satoshis is deducted as a maintenance fee.
HashFlare photos
The company presented these photos as its own.
The people of HashFlare
Miners in a data center rack
Unboxing a miner
Installing HashFlare hardware
The cloud is the future, and already our present: data storage, computing, cloud systems and much more. Soon it will push big noisy computers out of our homes :-)
Here is what I’m getting right now from my SHA-256 power. I’m not showing Scrypt: it just sits there earning a little, but I don’t recommend buying it.
Every week I withdrew whatever had been mined to my Bitcoin wallet. I sold the coins I had saved when the price went up, and from today I’ve decided to reinvest to increase my power. Once it reaches 0.5 TH/s, I’ll start withdrawing again: the dream of collecting 1 BTC is still alive :-)
P.S. I hope HashFlare will be around for a long time.
How the HashFlare story ended
It wasn’t to be. Here is how things unfolded:
- 2016–2017. Returns kept falling, and at best the package barely paid for itself. Instead of lifetime contracts, the company started selling one-year ones; changing your wallet put withdrawals on a two-week hold, and some customers had withdrawals stuck in a queue for weeks.
- July 2018. HashFlare stopped mining on SHA-256 contracts, saying bitcoin mining had become unprofitable.
- 2019. The service shut down.
- November 2022. HashFlare founders Sergei Potapenko and Ivan Turõgin were arrested in Tallinn on US charges over a $575 million fraud. In 2024 they were extradited to the United States.
- February 2025. Both pleaded guilty to conspiracy to commit wire fraud. According to the US Department of Justice, HashFlare sold more than $577 million in contracts from 2015 to 2019 but never had the computing power for that much mining: the customer dashboard showed made-up numbers.
- August 12, 2025. A court in Seattle sentenced each of them to 16 months, which they had already served, a $25,000 fine and 360 hours of community service. Prosecutors had asked for 10 years. Forfeited assets worth more than $450 million will go toward compensating victims.
If you also bought HashFlare contracts, the official page for victims is run by the FBI: fbi.gov/hashflare. The US Department of Justice says it will announce the compensation process separately.
My takeaway: by 2017 I had barely got my money back. Had I simply bought bitcoin in 2015, I would have done far better. The main lesson: “lifetime” income and nice data center photos guarantee nothing, and cloud mining with promised returns is a reason to be on guard.
If you want to invest in bitcoin, it’s simpler to buy coins directly on an exchange, for example on Binance (affiliate link). Crypto prices swing wildly: only invest what you can afford to lose.