HyperFund founder faces charges in $1.7 billion crypto scheme

US authorities have charged three suspects for their participation in a fraudulent crypto asset pyramid scheme, which garnered over $1.7 billion from investors globally.

Sam Lee, a 35-year-old Australian citizen living in Dubai, United Arab Emirates, has been charged in an unsealed indictment for co-founding HyperFund, also recognized as HyperTech, HyperCapital, HyperVerse, and HyperNation.

Additionally, Rodney Burton, aged 54 and based in Miami, and Brenda Chunga, aged 43, from Maryland, were charged with promoting HyperFund.

According to the authorities, from June 2020 through early 2022, the suspects promoted HyperFund “membership” packages, which they claimed guaranteed investors high returns.

To convince investors, HyperFund falsely asserted that the funds would be generated partially from its profits derived from large-scale crypto-mining operations.

“The only thing that HyperFund mined was its investors’ pockets,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

In 2022, the HyperFund scheme collapsed, and investors were no longer able to make withdrawals. According to the legal complaint, the suspects were aware of or showed reckless disregard for the fact that HyperFund operated as a pyramid scheme and had no genuine revenue stream aside from the investors’ funds.

“The level of alleged fraud here is staggering. Whether it’s cryptocurrency fraud or any other financial fraud, if it sounds too good to be true, it probably is,” commented US Attorney Erek L. Barron for the District of Maryland.

If convicted, the suspects face a maximum penalty of five years in prison.