The SEC Accuses HyperFund Founders of Running a Fraudulent Operation
The U.S. Securities and Exchange Commission (SEC) has accused the founders of the HyperFund crypto project of running a fraudulent operation that deceived more than one million investors. The SEC claims that the scammers enticed investors with promises of highly profitable mining operations and a metaverse project.
However, instead of using the funds raised to carry out these ventures, the organizers made payments to earlier investors. In total, they managed to amass $1.7 billion in assets from unsuspecting individuals. Additionally, the founders are facing charges of illegally offering securities.
Despite the magnitude of the scam, the maximum sentence for organizer Sam Lee and Bitcoin Rodney is five years. Brenda Chunga, also known as Bitcoin Beautee, can avoid prison by paying a fine and accepting all charges.
“As alleged in our complaint, Lee and Chunga investors attracted with the allure of profits from crypto asset mining, but the only thing that HyperFund mined was its investors’ pockets.”
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement
Estonia Approves Extradition of HashFlare and Polybius Bank Founders
In a separate case, Estonia has approved the extradition of Sergei Potapenko and Ivan Turogin, founders of cloud mining platform HashFlare and digital bank Polybius Bank, to the United States. The American authorities accuse them of cryptocurrency fraud and money laundering amounting to $575 million.
This is not the first time their extradition has been approved. It was initially granted in September last year but was overturned by a Tallinn court in November. Now, Estonia has decided to transfer them to the United States once again.
Hot Take: SEC Cracks Down on Crypto Fraud
The SEC’s recent actions against the HyperFund founders and the extradition approval of the HashFlare and Polybius Bank founders demonstrate the regulatory agency’s commitment to cracking down on crypto fraud. These cases highlight the risks associated with investing in the crypto industry and the importance of conducting thorough due diligence before committing funds. As cryptocurrencies continue to gain popularity, it becomes crucial for investors to stay vigilant and informed to avoid falling victim to scams and fraudulent schemes.
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