- HyperFund founders Lee and Chunga have been sued for alleged $1.7 billion cryptocurrency fraud.
- Cheong-ah agreed to a settlement pending court approval, and Lee plans to take legal action.
- The U.S. Attorney’s Office filed additional charges.
The US Securities and Exchange Commission (SEC) has taken decisive legal action against individuals allegedly involved in a $1.7 billion cryptocurrency ‘Ponzi’ scheme involving HyperFund, HyperVerse and HyperTech.
The defendants are Xue Lee, also known as Sam Lee, and Brenda Chunga, known as Bitcoin Beautee. They are accused of orchestrating a fraud scheme to defraud investors and violate federal securities laws.
Fake Membership Scheme
The lawsuit filed by the SEC on January 29, 2024, alleges Sam Lee and Brenda Chunga engaged in a fraudulent scheme that sold investors false “membership” plans and promised lucrative returns that never materialized. They claim to have participated. They allegedly misled investors with baseless claims that HyperFund’s cryptocurrency mining operations would yield significant profits and misrepresented their affiliation with a Fortune 500 company.
Brenda Chunga is accused of personally obtaining $3.7 million through fraud. She reportedly used the scam to buy a $1.1 million condo in Dubai, a $1.2 million home in Maryland and a BMW. Meanwhile, Xue Lee was accused of depositing approximately $140,000 worth of cryptocurrency into a cryptocurrency wallet she controlled.
Chenga, who now resides in Maryland, reached a settlement with the SEC, agreeing to refrain from future securities law violations and pay fines pending court approval. However, the SEC is currently taking legal action against Xue Lee, who resides in the United Arab Emirates, for alleged fraud and violation of registration laws, to stop his involvement in similar fraudulent activities, recover illegally obtained funds, and impose additional penalties. I’m trying.
In addition to the SEC lawsuit, the Maryland U.S. Attorney’s Office charged Lee and Cheonga with wire transfer and securities fraud. Cheongah reportedly acknowledged her role in the plan.
Further investigation revealed that Lee was associated with HyperVerse, another alleged scam targeting individuals in Asia, Africa, and the Pacific. The SEC speculates that Lee may be connected to other cryptocurrency scams, highlighting ongoing reports of fraudulent activity within the cryptocurrency industry.
Xue Lee, an Australian national, is being investigated by the Australian Securities Investment Commission over his links with the bankrupt Blockchain Global, which owed creditors $58 million when it collapsed in 2021. Australian regulators are considering the following allegations: Lee and his business partners Allan Guo and Ryan Xu were charged with breaching Australian corporate law.