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On Monday, the Department of Justice made public the criminal charges against two individuals and the admission of guilt by a third party for their roles in orchestrating a global cryptocurrency Ponzi scheme dubbed HyperFund.
Allegations Unveiled
Acting Assistant Attorney General Nicole Argentieri of the DOJ's Criminal Division disclosed that the trio falsely promised investors significant returns purportedly generated from cryptocurrency mining operations, which, in reality, never existed.
Erek Barron, the U.S. Attorney for Maryland, expressed astonishment at the scale of the alleged fraud.
Defendants and Charges
The criminal proceedings charge Sam Lee, an Australian residing in Dubai, United Arab Emirates, alleged to be a co-founder of HyperFund alongside two scheme promoters, Rodney Burton from Miami and Brenda Chunga from Severna Park, Maryland.
According to CNBC, Lee, also known as Xue Lee, faces a single count of conspiracy to commit securities fraud and wire fraud. Burton, known as "Bitcoin Rodney," is accused of operating an unlicensed money-transmitting business. Both individuals could face up to five years in prison if convicted.
Chunga, alias Bitcoin Beautee, admitted guilt to one count of conspiracy to commit securities fraud and wire fraud. She also agreed to settle civil charges brought by the Securities and Exchange Commission (SEC) for violations of anti-fraud and registration provisions.
Crypto Scam Scheme Unveiled
The DOJ asserts that from June 2020 to November 2022, Lee and accomplices marketed investment contracts via HyperFund's online platform, assuring investors of daily returns ranging from 0.5% to 1%, with promises of doubling or tripling their initial investment through revenue generated from large-scale crypto mining.
According to Crypto News BTC, the DOJ alleges that HyperFund initiated a freeze on investor withdrawals in July 2021.
The DOJ and the SEC have made substantial moves to bring justice to those affected by the fraudulent scheme, highlighting the need for vigilance and regulatory oversight in cryptocurrency.
Photo: Alexander Schimmeck/Unsplash
