SEC Charges Two Individuals in $1.9 Billion HyperFund Crypto Ponzi Scam

The cryptocurrency market has again been rocked by scandal as the US Securities and Exchange Commission (SEC) levies charges against two individuals allegedly masterminding a colossal Ponzi scheme involving HyperFund. 

This scheme, which promised extravagant returns through cryptocurrency mining operations, has drawn attention for its audacious deception and manipulation of unsuspecting investors.

HyperFund emerged in June 2020, positioning itself as a trailblazing enterprise in decentralized finance (DeFi). 

With grand promises of lucrative returns, the project enticed investors with membership packages supposedly linked to cryptocurrency mining ventures. 

Related: A Comprehensive Guide to Bitcoin Mining: How It Works and Its Challenges

HyperFund only mined its investors’ pockets

However, beneath the veneer of innovation lay a web of deceit and exploitation, making them discover that HyperFund’s operations were built on a foundation of deceit and exploitation.

The SEC’s investigation into HyperFund uncovered a disturbing truth: rather than generating profits through legitimate crypto mining activities, the project relied on a classic Ponzi scheme structure. 

Gurbir Grewal, the head of the SEC’s enforcement division, emphasized;

“The only thing that HyperFund mined was its investors’ pockets.”

Funds collected from new investors were used to pay returns to existing ones, creating a facade of success while concealing the absence of genuine revenue streams.

Erek Barron, the U.S. Attorney for Maryland, echoed these sentiments, emphasizing the severity of the allegations and the need for swift and decisive action. 

“The level of deception and manipulation in this case is deeply troubling. We will spare no effort in holding those responsible accountable for their actions.”

Barron remarked.

The Masterminds Behind The Scheme

Sam Lee, an Australian blockchain entrepreneur, and Brenda Chunga, a prominent figure in HyperFund’s promotional activities, are at the heart of the SEC’s accusations. 

These individuals allegedly played pivotal roles in marketing the fraudulent scheme, leveraging persuasive tactics to lure unsuspecting investors into a web of financial deception.

This incredibly sophisticated act could buy both individuals significant prison time with other severe punishments.

In addition to the SEC’s charges, the Department of Justice (DOJ) has also taken legal action against the individuals involved in HyperFund. 

Criminal indictments have been filed against Lee and Chunga, with a third individual, Rodney Burton, facing charges for his role in promoting HyperFund’s illicit activities. 

Burton, also known as “Bitcoin Rodney,” was apprehended in Florida for his involvement in the scheme.

Related: USI Tech Founder, Horst Jicha Arrested in $150 Million Crypto Fraud Scandal