Australia’s Assistant Treasurer to Investigate Regulator’s Failure to Warn Citizens
Australia’s Assistant Treasurer, Stephen Jones, has expressed his intention to investigate why the country’s securities regulator, ASIC, failed to warn citizens about the potential dangers of the HyperVerse crypto scheme. Jones plans to question ASIC regarding its failure to release a warning for consumers, despite other global regulators issuing such warnings. The scheme, which has been flagged as a suspected pyramid scheme and scam by foreign authorities, managed to evade the attention of Australian regulators. New Zealand, Hungary, Germany, Canada, and the United Kingdom have previously issued warnings on the scheme, but local regulators did not follow suit.
Details of the Scheme and Investigation
The HyperVerse crypto scheme resulted in significant losses for both local and foreign consumers. Chainalysis, an on-chain analytics firm, estimates that user losses could reach up to $1.3 billion. The operation was run by HyperTech, led by Chairman Sam Lee and “founder” Ryan Xu. Both Lee and Xu were former directors of Blockchain Global, an Australian crypto company that collapsed in 2021 and owed $58 million to creditors. The scheme operated as a membership system in which clients paid for subscription packages and received rewards. However, it was later revealed that early investors were able to withdraw funds while subsequent clients lost money.
Concerns Raised by Authorities
The investigation into the HyperVerse crypto scheme has raised concerns about fraudulent activities within the cryptocurrency industry. Authorities have described the scheme as a Ponzi scheme and a fraudulent pyramid scheme. Another investment platform associated with Sam Lee, called We Are All Satoshi, received a desist and refrain order from regulators in California. The CEO of HyperTech, Reece Lewis, is also under scrutiny as there are no records of his existence or qualifications. The failure of Australian regulators to warn citizens about the scheme has prompted calls for stricter regulation and oversight in the cryptocurrency market.
Hot Take: Australia’s Regulator Accountability
Australia’s securities regulator, ASIC, is facing scrutiny over its failure to warn citizens about the risks of the HyperVerse crypto scheme. Despite warnings from global regulators and suspicions of fraudulent activities, Australian authorities did not issue a warning to consumers. This raises concerns about the effectiveness of regulatory oversight in the cryptocurrency industry. The investigation into this case highlights the need for stricter regulations and increased accountability to protect investors from potential scams and pyramid schemes. It also emphasizes the importance of transparency and timely communication from regulators to ensure the safety of consumers in the evolving crypto market.
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