Two men have been arrested in Estonia on suspicion of defrauding $575 million (562 million euros) from hundreds of thousands of people in a cryptocurrency scheme, Estonian police said on Monday.

Sergei Potapenko and Ivan Turogin were arrested on Sunday in a joint operation by Estonian police and the FBI and Washington has requested extradition of the two men, the police said in a statement.

"This is one of the largest fraud cases we've ever had in Estonia," Oskar Gross, head of the police's cybercrime bureau, was quoted as saying.

The statement said the suspects "invited people to invest in their cryptocurrency token. However, they did not develop the token as promised".

"Fraud proceeds were allegedly laundered through real estate purchases and shell companies," it added.

The joint operation involved more than 100 police officers, including around 15 US federal agents.