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Crypto Fraud Crackdown: SEC, DOJ Charge HyperFund Founders In $1.8 Billion Scheme

Press Releases Crypto News Bitcoinist Crypto Fraud Crackdown: SEC, DOJ Charge HyperFund Founders In $1.8 Billion Scheme

In a significant development, the Department of Justice (DOJ) recently announced criminal charges against two individuals. It secured a guilty plea from a third person involved in a global crypto Ponzi fraud scheme known as HyperFund, among other aliases.

The Securities and Exchange Commission (SEC) also filed a related civil action, charging two individuals involved in the alleged crypto pyramid scheme, which collapsed in 2022.

DOJ And SEC Expose $1.8 Billion Crypto Pyramid Scheme

Acting Assistant Attorney General Nicole Argentieri of the DOJ’s Criminal Division stated that the three defendants falsely claimed that investors in HyperFund would receive “substantial returns paid from cryptocurrency mining operations, which did not exist.” US Attorney for Maryland Erek Barron described the level of alleged fraud in this case as staggering.

On the other hand, according to the SEC complaint, Xue Lee (Sam Lee) and Brenda Chunga (Bitcoin Beautee) have been charged for their roles in the fraudulent crypto asset pyramid scheme, which the SEC claims raised over $1.7 billion from investors worldwide.

The SEC’s complaint alleges that from June 2020 through early 2022, Lee and Chunga promoted HyperFund “membership” packages, promising investors high returns, including from HyperFund’s purported crypto asset mining operations and partnerships with a Fortune 500 company.

However, the complaint asserts that Lee and Chunga were aware or “recklessly” disregarded the fact that HyperFund was a pyramid scheme and lacked any real revenue source apart from investors’ funds.

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Author: Ronaldo Marquez

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