SEC settles with ‘Bitcoin Beautee’ over $1.7B HyperFund scheme

The Securities and Exchange Commission announced charges against two of the leaders involved in HyperFund, an alleged crypto pyramid scheme that raised over $1.7 billion.

Both Sam Lee and Brenda Chunga were charged for their involvement. Chunga, aka Bitcoin Beautee, settled with the SEC over the fraud and unregistered offering charges.

The regulatory agency states that the two “promoted HyperFund ‘membership’ packages, which they claimed guaranteed investors high returns, including from HyperFund’s supposed crypto asset mining operations and associations with a Fortune 500 company.”

“As alleged in our complaint, Lee and Chunga attracted investors with the allure of profits from crypto asset mining, but the only thing that HyperFund mined was its investors’ pockets,” said Gurbir Grewal, director of the SEC’s Division of Enforcement.

As part of Chunga’s settlement, she is “permanently enjoined from future violations of the charged provisions and certain other activity, and to pay disgorgement and civil penalties in amounts to be determined by the court at a future date. The settlement is subject to court approval.”

Lee, according to the SEC’s press release, faces litigation.

The two were charged with “violating the anti-fraud and registration provisions of the federal securities laws. The complaint seeks permanent injunctive relief, conduct-based injunctions preventing the defendants from participating in multi-level marketing or crypto asset offerings, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.”

The US Attorney’s Office of Maryland additionally announced criminal charges against both Lee and Chunga. Chunga pleaded guilty to conspiracy to commit wire fraud and securities fraud.

According to court documents, Lee is a citizen of Australia and a resident of the United Arab Emirates, while Chunga resides in Maryland.

Lee has also been linked to another alleged crypto scheme reported initially by the Guardian. He reportedly targeted investors across Asia, Africa and the Pacific in what was similarly dubbed “HyperVerse.”

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.