SEC Charges Individuals in $1.7 Billion Crypto Pyramid Scheme
From the desk of Jim Eccleston at Eccleston Law
The Securities and Exchange Commission (SEC) has filed charges against Xue Lee (aka Sam Lee) and Brenda Chunga (aka Bitcoin Beautee) for their involvement in the HyperFund crypto asset pyramid scheme, which fraudulently raised over $1.7 billion from global investors.
According to AdvisorHub, the SEC's complaint alleges that from June 2020 to early 2022, Lee and Chunga promoted HyperFund "membership" packages, falsely guaranteeing high returns from crypto asset mining operations and a supposed association with a Fortune 500 company. The SEC contends that Lee and Chunga were aware or reckless in not knowing that HyperFund was a pyramid scheme with no real revenue source other than investor funds. Following the scheme's collapse in 2022, investors could not withdraw.
The SEC seeks permanent injunctive relief, conduct-based injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties. Chunga has agreed to settle the charges, while criminal charges have been announced by the U.S. Attorney's Office for the District of Maryland against both Lee and Chunga, with Chunga pleading guilty to conspiracy to commit securities fraud and wire fraud.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
Tags: eccleston, eccleston law, sec