CDS Crypto News SEC Alleges Fraud Against Creators of 1.7 Billion Dollars HyperFund Scheme
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SEC Alleges Fraud Against Creators of 1.7 Billion Dollars HyperFund Scheme

Xue Lee and Brenda Chunga are alleged to have raised over $1.7 billion from investors worldwide in what the SEC characterizes as a pyramid scheme.

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SEC Alleges Fraud Against Creators of 1.7 Billion Dollars HyperFund Scheme

Crypto News- The Securities and Exchange Commission dropped a bombshell, accusing the $1.7 billion HyperFund scheme of fraud and engaging in an unregistered securities offering. In a stark announcement, the agency revealed that Xue Lee, who goes by the alias Sam Lee, and Brenda Chunga, known as Bitcoin Beautee, managed to pull in over $1.7 billion from investors worldwide between June 2020 and early 2022.

SEC Alleges Fraud Against Creators of 1.7 Dollars Billion HyperFund Scheme

The SEC asserted in a press release on Monday that Lee and Chunga pitched HyperFund as a lucrative investment in mining operations, only for it to unravel as a pyramid scheme with no tangible revenue sources. The complaint alleges that both Lee and Chunga were either fully aware or recklessly ignorant of the deceptive nature of their scheme. In 2022, the project collapsed, leaving investors in financial ruin.

Global Investor Scam: SEC Cracks Down on HyperFund’s 1.7 Billion Dollars Fraud

Director of the SEC’s division of enforcement, Gurbir S. Grewal, emphasized the recurring issue of noncompliance in the crypto space, allowing promoters to exploit the allure of quick riches without adhering to the necessary investor protection disclosures mandated by federal securities laws. The SEC filed the complaint in a federal district court in the District of Maryland, accusing Lee and Chunga of violating anti-fraud and registration provisions in federal securities laws.

Adding to the legal woes, the U.S. Attorney’s Office for the District of Maryland brought criminal charges against Lee and Chunga. Notably, Chunga has already entered a guilty plea for conspiracy to commit securities fraud and wire fraud. As part of a settlement, he agreed to pay disgorgement and civil penalties, the exact amounts of which will be determined by the court.

SEC Alleges Fraud Against Creators of 1.7 Billion Dollars HyperFund Scheme

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