- Three individuals face charges for orchestrating a $1.9 billion fraud scheme centered around a fake DeFi platform called HyperFund.
- Investors were promised daily returns of 0.5% to 1% through non-existent “large-scale crypto-mining operations.”
- It highlights the growing focus of law enforcement on curbing cryptocurrency-related scams and frauds, with over $1.7 billion stolen in crypto crimes in 2023 alone.
In a major blow to the cryptocurrency world, the US Department of Justice (DOJ) has charged three individuals an Australian and two Americans in a $1.9 billion cryptocurrency scam centered around a DeFi platform, HyperFund,
The accused include Sam Lee, the Australian co-founder of HyperFund, and Rodney Burton and Brenda Chunga, who are alleged to have promoted the fraudulent scheme.
According to the DOJ, the trio orchestrated the scam by falsely claiming that investment returns would stem from non-existent cryptocurrency mining operations.
The court revealed that from June 2020 to November 2022, the group offered and sold investment contracts through HyperFund, making deceptive claims of HyperFund memberships yielding daily passive rewards between 0.5% to 1%.
These returns were promised until the company doubled or tripled the investor’s initial investment. HyperFund asserted that the payments would be derived from large-scale crypto-mining operations, which, according to the DOJ, did not exist.
The scope of the alleged fraud prompted U.S. Attorney Erek L. Barron for the District of Maryland to comment on the staggering level of deception. The DOJ emphasized that from at least July 2021, HyperFund began blocking investor withdrawals.
Sam Lee and Brenda Chunga are charged with conspiracy to commit securities and wire fraud, while Rodney Burton faces charges related to running an unlicensed money-transmitting business.
Chunga has pleaded guilty. This could potentially complicate matters for Lee and Burton as prosecutors may seek to use her cooperation against them. If convicted, the trio could face up to five years in federal prison.
HyperFund, known by various names such as HyperTech, HyperCapital, HyperVerse, and HyperNation, became a focal point for defrauding investors.
This case highlights the growing focus of law enforcement agencies like the DOJ and the US Securities and Exchange Commission (SEC) on curbing cryptocurrency-related scams and frauds. With over $1.7 billion reportedly stolen in crypto crimes in 2023 alone, the need for robust regulatory measures is becoming increasingly apparent.
The charges against the HyperFund trio send a clear message about authorities’ commitment to deter fraudulent activities in the cryptocurrency space.
As cryptocurrency crimes persist, the DOJ and law enforcement partners continue to investigate, prosecute, and hold accountable those seeking to defraud the public, protecting financial systems from illicit activities.
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