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The U.S. Securities and Exchange Commission (SEC) has brought charges against the founders of the HyperFund crypto project. HyperFund is being accused of orchestrating a fraud operation that swindled over $1 billion from unsuspecting investors. SEC’s take on HyperFund 
SEC’s official statement, posted on their website, outlines the allegations against the HyperFund founders. According to the SEC, the scammers behind HyperFund established a crypto exchange to attract investments for <a href="https://news.todayq.com/dormant-bitcoin-btc-address-wakes-up-after-11-3-years-of-inactivity/" target="_blank" rel="noopener noreferrer nofollow">Bitcoin (BTC)</a> mining operations. The perpetrators, including Sam Lee, Burton (Bitcoin Rodney), and Brenda Chunga (Bitcoin Beautee), allegedly made payments to earlier investors using funds from new contributors, creating a pyramid-like structure that ultimately collapsed.
However, the SEC claims that instead of using funds responsibly, the organizers made payments to earlier investors with the money collected from new ones. The scheme managed to accumulate a staggering $1.7 billion in assets from unwitting investors. Alongside the charges, the founders of HyperFund are also accused of illegally offering securities.
Sam Lee, an Australian citizen and one of the organizers, is facing a maximum sentence of five years, as is Burton, known as Bitcoin Rodney. The third defendant, Brenda Chunga has the option to avoid prison by agreeing to all charges and paying a fine. “As alleged in our complaint, Lee and Chunga attracted investors with the allure of profits from crypto asset mining, but the only thing that HyperFund mined was its investors’ pockets,” stated Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.&nbsp;
Despite the significant scale of the scam, the potential penalties for the accused individuals may raise eyebrows. A maximum sentence of five years for orchestrating a $1.7 billion fraud might seem comparatively lenient.&nbsp; What’s more? 
In a separate development related to <a href="https://news.todayq.com/hong-kong-to-release-list-of-crypto-license-applicants-in-wake-of-jpex-crypto-fraud/" target="_blank" rel="noopener noreferrer nofollow">crypto fraud</a>, Estonia has approved the extradition of the founders of the cloud mining platform HashFlare and the digital bank Polybius Bank, Sergei Potapenko and Ivan Turogin, to the United States. American authorities accuse the two Estonian citizens of engaging in $575 million worth of cryptocurrency fraud and money laundering.
This move by Estonia comes after a legal rollercoaster, where the initial approval of extradition in September last year was overturned by a Tallinn court at the end of November. The extradition of Potapenko and Turogin to the United States highlights the international collaboration required to combat transnational cryptocurrency fraud.
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$1.7M pyramid crypto scheme exposed by SEC

Todayq News

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