An Australian and Two Americans Charged in $1.9 Billion Crypto Scam
An Australian citizen and two Americans have been accused by the U.S. Department of Justice (DOJ) of orchestrating a $1.9 billion cryptocurrency scam centered around a decentralized finance (DeFi) platform called HyperFund. The DOJ alleges that Sam Lee, the Australian citizen, co-founded HyperFund, while Rodney Burton and Brenda Chunga promoted it. Together, they allegedly defrauded investors by falsely claiming that investment returns would come from non-existent cryptocurrency mining operations.
The DOJ described the level of fraud as staggering and emphasized that perpetrators of such schemes will be held accountable. From June 2020 to November 2022, the trio offered and sold investment contracts through HyperFund, making false claims about daily passive rewards for investors. However, the mining operation that was supposed to generate these payments did not actually exist.
HyperFund Blocks Investor Withdrawals
Beginning in July 2021, HyperFund started blocking investor withdrawals, according to the DOJ. Lee and Chunga are charged with conspiracy to commit securities and wire fraud, while Burton is charged with running an unlicensed money-transmitting business. Chunga has pleaded guilty. If convicted, all three face a maximum sentence of five years in federal prison.
The DOJ also noted that HyperFund is known by various other names, including HyperTech, HyperCapital, HyperVerse, and HyperNation.
Increased Efforts to Combat Cryptocurrency Scams
While cryptocurrency crimes are not new, regulatory agencies like the DOJ and the U.S. Securities and Exchange Commission (SEC) have intensified their efforts to combat scams involving digital assets. A recent report by TRM Labs revealed that over $1.7 billion in cryptocurrency had been stolen in 2023 alone. Additionally, hackers stole more than $4 million this month through fraudulent airdrops and scams targeting Solana holders.
The DOJ has not yet responded to Decrypt’s request for comment on the case.
Hot Take: DOJ Cracks Down on Massive Crypto Scam
An Australian citizen and two Americans have been charged by the U.S. Department of Justice for their involvement in a $1.9 billion cryptocurrency scam. The trio allegedly defrauded investors by falsely claiming that investment returns would come from non-existent cryptocurrency mining operations. This case highlights the ongoing efforts by regulatory agencies to combat cryptocurrency scams and protect investors. With the increasing popularity of cryptocurrencies, it is crucial for individuals to exercise caution and skepticism when presented with investment opportunities that seem too good to be true.
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