SEC Accuses HyperFund of Fraud:
- Xue Lee and Brenda Chunga are accused by the SEC of raising $1.7 billion in a pyramid scheme.
- HyperFund, presented as a mining investment opportunity, turns out to be a fraud.
- Chunga pleads guilty to conspiracy to commit securities fraud and electronic fraud.
HyperFund x SEC: A $1.7 Billion Case
The Securities and Exchange Commission (SEC) recently filed charges of fraud and unregistered securities offering against the HyperFund project. The estimated amount of fraud is $1.7 billion, raised from investors worldwide between June 2020 and early 2022, according to the agency’s announcement.
In June 2020, Xue Lee and Brenda Chunga, known as Sam Lee and Bitcoin Beautee, launched HyperFund, promising lucrative returns through cryptocurrency mining operations. However, this promise hides a dark reality.
The US SEC reveals that behind the facade of an innovative company, there was a classic pyramid scheme (Ponzi), with no real source of income, exposing the dubious practices associated with investments in unregulated cryptographic projects.
This case once again illustrates how non-compliance in the crypto space facilitates projects where promoters capitalize on the promise of easy money, without providing the detailed investor protection information required by federal securities registration laws.
Looking Back at the Collapse of HyperFund
The collapse of HyperFund in 2022 resulted in massive losses for investors, attracting the attention of regulatory authorities.
Recently, the SEC filed a lawsuit against Lee and Chunga for fraud and unregistered securities offering, highlighting the lack of compliance and transparency in their operations.
On the other hand, Chunga acknowledges her guilt and agrees to settle the charges while awaiting determination of the amounts of compensation and civil penalties by the court.
