HyperVerse
was
a
nearly
$2
billion
fraudulent
crypto
investment
scheme
with
a
fake
CEO
at
its
helm,
the
U.S.
Securities
and
Exchange
Commission
(SEC)
and
a
grand
jury
allege
in
a
lawsuit
and
criminal
indictments
against
two
of
its
leaders.
The
online
investment
business,
which
variously
carried
brands
including
HyperFund,
HyperCapital
and
HyperTech,
is
said
to
have
taken
as
much
as
$1.89
billion
from
people
around
the
world
who
were
drawn
in
by
promises
of
quick
riches.
The
business
began
around
June
2020.
The
SEC
lawsuit
alleges
that
Sam
Lee,
an
Australian
founder
who
lives
in
the
United
Arab
Emirates,
and
Brenda
“Bitcoin
Beutee”
Chunga,
a
promoter
of
the
business
from
Maryland,
cheated
investors
with
this
“pyramid
and
Ponzi
scheme.”
Chunga
agreed
to
settle
the
SEC
accusations,
the
agency
said.
“HyperFund
even
hired
an
actor
to
pretend
to
be
the
new
CEO
when
HyperVerse
was
launched,”
according
to
an
SEC
complaint
filed
Monday,
detailing
that
the
executive
known
as
Steven
Reece
Lewis,
who
delivered
a
speech
during
the
launch
event,
was
a
TV
presenter
who
lives
in
Thailand.
“With
no
apparent
legitimate
source
of
revenues,
investor
withdrawals
were
paid
with
new
investor
deposits,”
the
SEC
alleged
in
the
complaint.
A
request
for
comment
sent
to
the
company
didn’t
get
an
immediate
response.
“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,”
said
Gurbir
Grewal,
director
of
the
SEC’s
enforcement
division,
in
a
statement.
The
SEC
said
Chunga
took
about
$3.7
million
personally
and
spent
it
on
a
BMW,
designer
clothing,
a
$1.2
million
home
in
Maryland
and
a
$1.1
million
condo
in
Dubai.
Lee
took
$140,000
in
digital
funds
to
a
wallet
under
his
control,
according
to
the
complaint.
An
indictment
dated
Jan.
25
in
the
U.S.
District
Court
for
the
District
of
Maryland
accused
Lee
and
Cunga
in
a
conspiracy
to
commit
wire
fraud.
The
SEC
also
accused
them
of
offering
unregistered
securities
and
demanded
they
give
back
any
ill-gotten
gains.
If
the
court
accepts
the
deal,
Chunga
agreed
to
settle
the
charges,
accepting
a
ban
on
certain
activities
and
to
fines
that
would
be
determined
by
the
court.
Read
More:
U.S.
Arrests
‘Bitcoin
Rodney,’
Alleged
HyperVerse
Crypto
Scheme
Promoter,
on
IRS
Charges
of
Fraud
Earlier
this
month,
U.S.
authorities
arrested
and
charged
Rodney
Burton
for
allegedly
defrauding
more
than
$7
million
through
the
same
fake
investment
scheme,
according
to
allegations
from
the
U.S.
Internal
Revenue
Service.
Founders
of
HyperTech,
Lee
and
his
business
partner
Ryan
Xu,
also
founded
the
collapsed
Australian
bitcoin
company
Blockchain
Global,
which
owes
creditors
$58
million.
Elizabeth
Napolitano
contributed
reporting.
UPDATE
(January
29,
2024,
23:04
UTC):
Adds
comment
from
the
SEC
enforcement
director
and
the
settlement
of
Chunga.
