SEC Charges Individuals in $1.7 Billion Crypto Pyramid Scheme

Posted on March 18th, 2024 at 4:11 PM
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

Return to Archive

TESTIMONIALS

Previous
Next

I have the best legal firm in the country to defend me. Awesome job!

Cindy C.

LATEST NEWS AND ARTICLES

June 30, 2025
SEC Charges New Mexico Investment Advisor with Fee Fraud and Fiduciary Breaches

The Securities and Exchange Commission (“SEC”) has charged David A. Nagler and his firm, New Line Capital LLC, with defrauding clients through deceptive fee disclosures and undisclosed conflicts of interest.

 

June 27, 2025
FINRA Sanctions Advisor for Accepting $1 Million Inheritance from Client Without Firm Approval

FINRA has fined and suspended veteran advisor Kenneth J. Malm for accepting a $1 million inheritance from a client without receiving the necessary firm approval.

June 26, 2025
SEC Charges Marine Veteran in $2.5 Million Ponzi Scheme

The Securities and Exchange Commission (“SEC”) has charged Marine Corps veteran Christopher Aubin with fraud, accusing him of running a $2.5 million Ponzi scheme that defrauded dozens of investors, including several of his former military colleagues.