Australia’s consumer watchdog criticized for failing to warn against HyperVerse crypto scheme
The Australian Securities and Investments Commission (ASIC) is facing backlash for not issuing a warning about the HyperVerse crypto investment scheme. International regulators had flagged the scheme as potentially fraudulent, but ASIC did not take action. Previous investigations reported substantial losses to retail investors in the scheme, which was labeled a probable scam and suspected pyramid scheme. Chainalysis identified HyperVerse as a top perpetrator of crypto scams, with revenue of nearly $1.3 billion. Assistant Treasurer Stephen Jones questioned ASIC’s vigilance and highlighted that other countries had issued warnings about HyperVerse in 2021.
HyperVerse chief executive may be fictitious
HyperVerse, part of the HyperTech group, attracted investors with promises of high returns that turned out to be dubious. An investigation suggested that Steven Reece Lewis, the alleged CEO of HyperVerse, may not exist. The scheme was promoted by Australian entrepreneurs Sam Lee and Ryan Xu, who were associated with the now-defunct company Blockchain Global. Lewis remains untraceable, raising doubts about his existence. With these revelations, attention is turning to ASIC’s regulatory strategies to prevent similar incidents in the future.
Concerns about investor security
The lack of action by ASIC and the potential existence of a fictitious CEO have raised concerns about investor security. A recent CertiK report revealed that there were 751 security incidents in 2023, resulting in a loss of approximately $1.8 billion in digital assets. This highlights the need for improved regulatory measures to protect investors from scams and fraudulent schemes.
Hot Take: ASIC’s failure to warn against HyperVerse raises questions about investor protection
The Australian Securities and Investments Commission (ASIC) is facing criticism for its failure to issue a warning about the potentially fraudulent HyperVerse crypto investment scheme. Despite international regulators flagging the scheme, ASIC did not take action, leading to substantial losses for retail investors. The existence of a potentially fictitious CEO adds another layer of concern. With the increasing number of security incidents in the crypto industry, it is crucial for regulatory authorities like ASIC to refine their strategies and provide better investor protection. This incident highlights the need for stronger measures against scams and fraudulent schemes in the cryptocurrency space.
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