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 just received this letter from the CFP Board. Thank you, Thank you, THANK YOU!

David Y

LATEST NEWS AND ARTICLES

September 11, 2025
Montana Federal Judge Allows Family's Premium Financing Claims to Proceed

A federal judge in Montana has allowed a family to move forward with negligence, fraud, and unjust enrichment claims tied to a premium-financed life insurance arrangement valued at $67.5 million.

September 10, 2025
Arizona Man Sentenced to 30 Years for Multi-Million Dollar Ponzi-Style Fraud

An Arizona man has been sentenced to 30 years in prison for running a Ponzi-style investment scheme that defrauded more than 100 victims out of millions of dollars, according to the U.S. Attorney’s Office for the District of New Mexico.

September 9, 2025
Easterly ROCMuni Fund's Steep Decline Spurs Potential Investor Lawsuits

The Easterly ROCMuni High Income Municipal Bond Fund (RMHIX) has suffered a dramatic collapse, losing nearly half its value in June and now trading at a net asset value (NAV) of $2.95 per share.