News

HyperFund Crypto Ponzi Scheme Founders Defraude Investors Of $1.7 Billion

Key Points:

The SEC charges Xue Lee and Brenda Chunga with a $1.7 billion crypto pyramid scheme called HyperFund.
Lee and Chunga promoted HyperFund memberships, promising high returns from crypto asset mining and a Fortune 500 association, despite knowing it was a pyramid scheme.
The HyperFund crypto ponzi scheme collapsed in 2022, preventing investors from withdrawing funds.

The Securities and Exchange Commission (SEC) has charged Xue Lee (aka Sam Lee) and Brenda Chunga (aka Bitcoin Beautee) for their involvement in the HyperFund crypto ponzi scheme, which raised over $1.7 billion from global investors.

HyperFund Crypto Ponzi Scheme Founders Defraude Investors Of $1.7 Billion 2

SEC Charges Xue Lee and Brenda Chunga in $1.7 Billion HyperFund Crypto Ponzi Scheme

The SEC’s complaint alleges that from June 2020 to early 2022, Lee and Chunga promoted HyperFund “membership” packages, promising high returns from crypto asset mining and ties to a Fortune 500 company. However, they knew or were reckless in not knowing about the HyperFund crypto ponzi scheme without genuine revenue.

In 2022, the scheme collapsed, rendering investors unable to withdraw funds. Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, stated, “Lee and Chunga attracted investors with the allure of profits from crypto asset mining, but the only thing that HyperFund mined was its investors’ pockets.”

The SEC charges Lee and Chunga with violating anti-fraud and registration provisions. The complaint seeks permanent injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

Chunga has agreed to settle, subject to court approval, pleading guilty to conspiracy to commit securities fraud and wire fraud. The settlement includes permanent injunctions, the payment of disgorgement, and civil penalties. Simultaneously, the U.S. Attorney’s Office for the District of Maryland announced criminal charges against Lee and Chunga.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.