Polybius: What It Meant and How It Worked

What Was Polybius?

The Polybius project, established by the Estonian Polybius Foundation, claimed to be a digital crypto-project focused on creating a financial institution that utilized blockchain technology. When it launched, it was intended to be the first fully digital European bank to be crowdfunded by its users.

Warning

In November 2022, Polybius creators Sergei Potapenko and Ivan Turõgin were arrested and extradited from Estonia for fraud. They were indicted in the U.S. for masterminding a $575 million cryptocurrency Ponzi scheme. If you were a victim of this scheme, you can visit the Federal Bureau of Investigation’s Seeking Victim Information page for help.

Key Takeaways

• The Polybius project, established by the Estonian company Polybius Foundation, was a blockchain and cryptocurrency project claiming to be creating a financial institution that utilizes blockchain technology.
• The Polybius project advertised that it sought to unite legacy banking structures with more modern technologies.
• Following the arrest and indictment of the Polybius project’s founders in 2022, the project’s website is down, and the FBI is seeking information from potential victims.

The Polybius Project History

Instead of an initial public offering (IPO), or traditional crowdfunding, Polybius opted for an initial coin offering (ICO), which they launched on May 31, 2017. Even before the ICO launched, the company estimated that it had 500,000 early adopters.

The ICO removed the commission fees collected on crowdfunding sites and allowed for smart contracts that exist in the Ethereum blockchain. These smart contracts facilitated a permanent relationship between Polybius and the individual who owned the contract (these smart contracts have been referred to as Polybius Tokens).

Essentially, these tokens indicated that token owners would be paid out of Polybius’s profits. Each token represented a contract between Polybius and the token owner in which Polybius agreed to pay out 20% of company earnings to owners of these smart contracts annually. The other 80% were “reinvested” into the project.

While the smart contracts “existed” within the Ethereum blockchain and Polybius caters to cryptocurrencies and startups, the money in Polybius’s bank and Polybius Tokens were to be guaranteed by a fiat currency.

At the end of its ICO, Polybius had raised more than $23 million.

In November 2022, Polybius founders Sergei Potapenko and Ivan Turõgin were arrested and extradited from Estonia for fraud. They were extradited from Estonia in May 2024 and are charged with organizing a $575 million Ponzi scheme.

How Polybius Claimed to Work

When the project was first announced, Polybius’s bank was reportedly going to offer a traditional selection of financial services (such as deposits, credit financing, issuing bank cards, etc.) not only to cryptocurrency startups but also to traditional businesses and individuals. In this way, the project claimed it sought to unite legacy banking structures with more modern technologies.

The Polybius project aimed to distinguish itself from traditional banking institutions in several ways. First, Polybius’s bank would be a modern, digitized bank, aimed at improving convenience, accessibility, communication, and security. This digitization would also cut down on some of the expensive operating costs of non-digitized banks (these costs are typically transferred to customers).

This digitization would include a significant amount of automation, plus the migration of agreements that are typically finalized in a physical bank to a digital one. Additionally, Polybius aimed to digitize records of all its internal documentation and all its external transactions in a blockchain.

What Was Polybius Known For?

Polybius was a Greek historian who documented the rise of Rome. It was also a cryptocurrency project whose founders were arrested in 2022 for orchestrating a Ponzi scheme.

What Is the Meaning of Polybius?

Polybius was a blockchain project that claimed it was creating the first blockchain and cryptocurrency bank.

Why Was Polybius Detained?

The Polybius blockchain project founders were arrested and charged with organizing a Ponzi scheme. Polybius, the Greek historian, was supposedly accused of being anti-Roman and exiled.

The Bottom Line

Polybius was a blockchain and cryptocurrency project reportedly designed to become the first cryptocurrency bank. Its founders were arrested in 2022 and charged with orchestrating a Ponzi scheme. As of November 2024, they are awaiting trial with a date set for March 17, 2025.