Hyperverse alleges $1.7B ‘Ponzi’ promised HK listing and hired fake CEO.
At least two people were involved in a $1.7 billion cryptocurrency “fraud” scheme that once promised investors a listing on the Hong Kong stock exchange and hired an actor to play the company's CEO, according to an indictment from a US securities regulator. .
In a new complaint from the Securities and Exchange Commission, the regulator on Jan. 29 moved that Shue Lee (aka Sam Lee) and Brenda “Bitcoin Beautee” Chunga be involved in the scheme — which goes by several names like HyperFund, HyperVerse. and hypertech.
The two are said to have promoted various “membership” packages to investors with the promise of guaranteed guarantees, high returns from cryptocurrency mining operations and “unearned profits” to buy luxury cars and fund condos and crypto wallets.
The SEC said it had previously agreed to settle the lawsuit and pay civil penalties, while she – along with Lee – is also facing charges from the US District Attorney's Office. Maryland for securities fraud and wire fraud. Chung also admitted to the criminal charges.
A third person, promoter Rodney Burton, was also charged by prosecutors.
According to the SEC report, Li HyperTech was listed on the Hong Kong Stock Exchange in 2015. It has told recruiters it plans to list in 2022. The securities regulator alleges the couple shared fake screenshots from a CNN and Amazon Prime documentary. To enhance the company's reputation.
The company's marketing efforts went so far as to hire a Thai actor to promote the Hyperverse startup, with the fake actor portraying its CEO, the SEC said.
“In reality, the man as [Steven Reece] Lewis was an actor playing a fictional character. He was not the CEO of HyperVerse.
The SEC has lured many recruits by operating a pyramid scheme-like referral system offering rewards to existing members for recruiting new investors, in addition to false promises that new recruits can participate in coin offerings at 20-30% below market value.
Chunga is accused of personally taking $3.7 million that was spent on a $1.2 million home in Maryland, a $1.1 million condo in Dubai, a BMW and designer clothing, while Lee took about $140,000 in cryptocurrency in the purse seized, the SEC said. .
This trade, which took place between June 2020 and May 2022, shows how widespread fraud and non-compliance with US securities laws are in the cryptocurrency industry, SEC Enforcement Division Director Gurbir S. Grewal said in a January 29 statement.
“As stated in our complaint, Lee and Chunga lured investors and made profits from mining cryptocurrencies, but the only thing HyperFund took out was the investors' pockets.”
The SEC seeks permanent injunctive relief, barring the defendants from engaging in multi-level trading or cryptocurrency offerings, disgorgement of ill-gotten gains, prejudgment interest and civil penalties.
Related: SEC ‘deeply regrets' mistakes related to crypto firm enforcement case
Chunga is based in Maryland and Lee is an Australian citizen who the SEC believes currently resides in the United Arab Emirates.
According to a report by The Guardian on January 23, Lee is said to be under investigation by Australia's securities regulator after his “failed” cryptocurrency business, Blockchain Global, collapsed in 2021 due to creditors.
The Australian Securities Investments Commission may file charges against Li and two of his business partners, Alan Guo and Ryan Xu, for possible breaches of the Corporations Act.
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