$1.8B HyperFund Crypto Fraud Scheme Falls as DOJ Charges Three

The U.S. Department of Justice has announced charges against three defendants in a $1.8 billion cryptocurrency fraud scheme.

Three clowns arrested by the DOJ.
Created by Kornelija Poderskytė from DailyCoin
  • The U.S. DOJ has announced charges in a billion-dollar crypto fraud scheme.
  • Three individuals have been charged in the case.
  • They include an Australian entrepreneur and two U.S. nationals.

The U.S. Department of Justice (DOJ) has charged three individuals, including Australian crypto entrepreneur Sam Lee, for their alleged role in a billion-dollar crypto fraud scheme.

On January 29, the DOJ announced multiple charges against Lee alongside U.S nationals Rodney Burton and Brenda Chunga for allegedly “orchestrating a $1.89 billion cryptocurrency fraud scheme” through HyperFund, also known as HyperTech or HyperCapital.

Fraud Scheme Built on HyperFund’s Online Investment Platform  

According to the DOJ’s statement, Lee allegedly co-founded HyperFund, and his co-conspirators participated in its promotion.

The DOJ accused the trio of duping investors into purchasing HyperFund “memberships,” promising them daily passive rewards of between 0.5% and 1% “until the company either doubled or tripled the investor’s initial investment.”

“HyperFund allegedly claimed that its payments would be disbursed in part from its revenues from large-scale crypto mining operations, when in truth, HyperFund did not have such operations. Beginning in at least July 2021, HyperFund allegedly began to block investor withdrawals,” the DOJ wrote.

Based on the allegations, the DOJ charged Lee with one count of conspiracy to commit securities fraud and wire fraud and Burton with one count of conspiracy to operate an unlicensed money-transmitting business and one count of operating an unlicensed money-transmitting business.

Both Lee and Burton face a maximum penalty of five years imprisonment if convicted.

In the meantime, Chunga pleaded guilty to one count of conspiracy to commit securities fraud and wire fraud and could face up to three years in prison. The trio will be arraigned before a federal district judge later.

Read why the DOJ believes CZ is a flight risk while awaiting trial in the U.S.:
DOJ Asserts CZ Flight Risk in Bond Terms Dispute

Stay updated on SBF’s second trial delay:
Here’s Why SBF’s Second Trial Halt Has Sparked Outrage

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Brian Danga

Brian Danga, a Kenyan crypto reporter, is dedicated to delivering breaking news and updates from the cryptocurrency world. With a background as a Web3 writer and project manager, he recognizes the importance of unbiased reporting. Holding an LLB degree from the University of Nairobi, Brian's analytical skills contribute to his accurate news reporting. His personal interests include cooking, watching documentaries, reading, and engaging in intellectual discussions.