Two Individuals Charged in $1.7 Billion Crypto Scam Promising High Returns
Summary:
A lawsuit from the US Securities and Exchange Commission has accused two individuals, Xue Lee and Brenda Chunga, of devising a $1.7 billion cryptocurrency scam that involved false promises of high returns from crypto mining operations. Their firm, known by several names including HyperFund, HyperVerse, and HyperTech, allegedly used fraudulently obtained funds to purchase luxury items. The pair also faces charges for conspiracy to commit securities fraud. The SEC is seeking permanent court orders, recoupment of illegitimate gains, and civil penalties. Lee, an Australian national, is also being investigated by Australian authorities regarding his involvement in another failed crypto enterprise.
A duo has been implicated in a purported $1.7 billion cryptocurrency swindle, attracting investors with the prospect of being listed on the Hong Kong Stock Exchange and even going as far as hiring an actor to impersonate the company's CEO, reveals a lawsuit from the US regulatory body. The Securities and Exchange Commission recently condemned Xue Lee and Brenda Chunga, both aliases, for their part in the operation, which was propagated under various names such as HyperFund, HyperVerse, and HyperTech. The pair allegedly offered various investment packages with guaranteed high returns from cryptocurrency mining operations. The falsely earned funds were then reportedly used on lavish items like luxury vehicles, high-end condos, and filling crypto wallets.
Despite Chunga willingly settling the charges and being scheduled to pay civil penalties yet to be decided, both Lee and Chunga face charges from the U.S. Attorney’s Office for the District of Maryland for conspiracy to commit securities fraud and wire fraud. Chunga has already confessed to these criminal charges. Another individual, Rodney Burton, has also been indicted. The SEC reveals that Lee once boasted to recruiters about HyperTech's plan to join the Hong Kong Stock Exchange by this year. Moreover, the SEC alleges the twosome falsely showed images of various media appearances on platforms like CNN and an Amazon Prime documentary titled “Next: Blockchain” to enhance the company's image.
Interestingly, the company even employed an actor from Thailand to act as the firm's CEO for the launch of HyperVerse. However, the SEC states that this was just a fictional character and he had no connection with HyperVerse. Furthermore, Lee established a pyramid scheme-like referral system to incentivize existing members to bring new investors into the scam, fueling it with false promises of participation in initial coin offerings notably below market prices.
The SEC accuses Chunga of personally acquiring $3.7 million, out of which a $1.2 million house in Maryland, a $1.1 million condo in Dubai, a BMW, and designer attire were bought. On the other hand, Lee reportedly transferred approximately $140,000 worth of cryptocurrency into a private wallet. This illustrates how rampant fraud and violation of US securities laws continue to persist within the cryptocurrency sector, stated Gurbir S. Grewal, the Enforcement Division Director of the SEC, as a reaction to the lawsuit. He added, “the only thing that HyperFund mined was its investors’ pockets.”
The SEC now intends to Institute permanent court orders, preventative measures hindering defendants from participating in multilevel marketing or cryptocurrency offerings, recoupment of unlawfully obtained profits, precourt interest, and civil penalties. Although Chunga is a resident of Maryland, Lee, originally from Australia, is believed to be residing in the United Arab Emirates.
An investigation is also underway by the Australian securities regulator following the collapse of Lee's allegedly “failed” cryptocurrency venture, Blockchain Global, that left creditors $58 million in debt, reported The Guardian. It is anticipated that the Australian Securities Investment Commission may bring charges against Lee and his associates, Allan Guo and Ryan Xu, for potential breaches of the Corporations Act.
Published At
1/30/2024 8:53:06 AM
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