US authorities have cracked a cryptocurrency Ponzi scheme called HyperFund, which raised up to 18 from investors..$900 million in funding and filed civil and criminal charges against its founder, Xue Lee。Civil charges are filed by the Securities and Exchange Commission (SEC) and criminal charges are filed by federal prosecutors.。

Massive Cryptocurrency Ponzi Scheme

The civil charges also named Bitcoin Beaudee, one of the main promoters of the Ponzi scheme, while the criminal charges named Chunga and another promoter, Rodney Burton.。Chunga has pleaded guilty to both civil and criminal charges.。

According to court documents, Hyperfund operated between June 2020 and early 2022, selling "membership" packages to investors.。The fund claims that its so-called crypto asset mining business and its partnership with a Fortune 500 company "guarantee investors high returns."。

But in reality, the fund does not have any real source of income。The fund operates as a pyramid scheme, using the proceeds of new investors to pay old investors。The fraud collapsed in 2022 and stopped withdrawals by investors.。

The SEC estimated the size of the fraud fund at $1.7 billion, while federal prosecutors put the figure at 18..900 million dollars。

SEC Enforcement Director Gurbir Grewal said: "As we allege in the indictment, Lee and Chunga attracted investors with the lure of crypto-asset mining profits, but HyperFund dug into the pockets of investors.。"

Strong intervention by authorities

The SEC charged Lee and Chunga with violations of anti-fraud and registration rules and demanded the recovery of investor earnings, as well as a fine that has not yet been determined.。Meanwhile, federal prosecutors charged Lee and Chunga with one count of conspiracy to commit securities fraud and wire fraud.。

Burton faces one count of conspiracy to operate an unlicensed remittance business and one count of operating an unlicensed remittance business。The maximum penalty for each criminal charge is five years.。While Chunga pleaded guilty, her fine in the civil suit and the length of her sentence in the criminal charges have yet to be determined.。

Maryland federal prosecutor Erek Barron said: "The extent of the alleged fraud here is staggering.。Whether it's cryptocurrency fraud, or any other financial fraud, if it doesn't sound too good to be true, it probably is.。This office and our law enforcement partners will hold perpetrators of these and other fraud schemes accountable。"