The Securities and Exchange Commission (SEC) announced the indictment of the $1.7 billion HyperFund scheme on charges of fraud and offering unregistered securities.
Xue Lee and Brenda Chunga, also known as Sam Lee and Bitcoin Beautee, respectively, raised more than $1.7 billion from investors around the world between June 2020 and early 2022, the SEC said in a press release Monday.
Lee and Chung-ah advertised the hyperfund as an opportunity to invest in a profitable mining business, but in reality it was a pyramid scheme with no real revenue stream, the SEC alleged. Both Lee and Cheong-ah added, “It was a reckless act that they either knew or did not know.” “ In 2022, the project collapsed and investors lost their money.
Director Gurbir S. Grewal said, “This case once again shows how non-compliance in the cryptocurrency industry is allowing promoters to promote schemes that promise easy money without providing the detailed investor protection disclosures required by the registration provisions of the federal securities laws. “I will give it to you,” he said. SEC’s Enforcement Division.
The SEC filed a complaint in the U.S. District Court for the District of Maryland against Mr. Lee and Mr. Cheunga, alleging violations of the anti-fraud and registration provisions of the federal securities laws. The Maryland District Attorney’s Office also filed criminal charges against Mr. Lee and Mr. Cheonga.
Cheongah has already pleaded guilty to conspiracy charges including securities fraud and wire fraud. He also agreed to settle the charges and pay restitution and civil penalties in an amount to be determined by the court.
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About the author
Anna is a senior policy reporter at The Block. She has a background in political journalism and has covered Russian civil society for various media outlets in Moscow, including her award-winning newspaper, Novaya Gazeta. Before joining The Block, Anna spent the past five years researching global cryptocurrency policy and adoption at CoinDesk. Anna says she owns Bitcoin and gift NFTs that have sentimental value.