SEC charges Founder and Promoter of HyperFund scheme with Fraud

SEC action against Sam Lee and Bitcoin Beautee in the $1.7 billion HyperFund crypto pyramid scheme case. Investor protection at the forefront.

SEC has filed lawsuits against Brenda Chunga, also known as Bitcoin Beautee, and Xue Lee, also known as Sam Lee, for their roles in the fraudulent HyperFund bitcoin pyramid scheme. Worldwide cryptocurrency investors contributed more than $1.7 billion to the plan.

Lee and Chunga aggressively marketed HyperFund “membership” packages, allegedly offering significant profits that could not be missed, according to the SEC’s lawsuit. The claims were made that HyperFund’s purported mining activities for cryptocurrency assets and its connections to a Fortune 500 corporation would produce these profits.

According to SEC accusations, Xue Lee and Brenda Chunga knew that HyperFund was a pyramid scheme and that its primary revenue source was money from new investors. They also either demonstrated complete ignorance of this fact or exhibited a lack of concern towards it.

Many investors suffered losses as a result of the HyperFund fraud, as their money was not recouped following its failure. Responding to this, the SEC filed a complaint in the Maryland District Court, claiming that Lee and Chunga had engaged in fraudulent and unregistered activities, in violation of federal securities laws.

A permanent ban to prevent the defendants from participating in multi-level marketing or cryptocurrency-related operations is one of the remedies the SEC requests in its complaint, given their actions. The objectives of the SEC are to recoup earnings that were acquired by misconduct, impose financial penalties, and charge interest on these gains prior to judgment.

After consenting to a permanent injunction and accepting responsibility for disgorgement and civil penalties, Brenda Chunga has consented to resolve allegations pertaining to the HyperFund scheme, subject to court approval.

Criminal charges have also been brought against Brenda Chunga and Xue Lee by the U.S. Attorney’s Office in Maryland. For securities and wire fraud, Chunga has already entered a guilty plea. In the digital asset market, it is crucial to safeguard investors and maintain vigilance. This case highlights regulatory measures to reduce bitcoin theft.

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