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DOJ Charges Three People in $1.9 Billion Crypto Scam

Three individuals, including one from Australia and two from the United States, are facing serious charges related to an enormous cryptocurrency scam worth $1.9 billion, as per the U.S. Department of Justice.

According to the DOJ, Sam Lee, an Australian citizen, is alleged to have co-founded HyperFund, a purported decentralized finance (DeFi) platform. Rodney Burton and Brenda Chunga, both Americans, are accused of promoting this platform. Together, they’re accused of deceiving investors by falsely claiming that returns would be generated from non-existent cryptocurrency mining operations.

U.S. Attorney Erek L. Barron stressed the severity of the alleged fraud, cautioning investors against schemes that appear too good to be true. Barron affirmed that the DOJ, along with its law enforcement partners, is committed to holding perpetrators accountable for such fraudulent activities.

Between June 2020 and November 2022, the trio allegedly solicited investments through HyperFund, promising daily passive rewards ranging from 0.5% to 1% to investors. These returns were purportedly generated from revenues from large-scale crypto-mining operations, which, according to the DOJ, did not exist.

Furthermore, HyperFund reportedly began blocking investor withdrawals from at least July 2021, exacerbating the situation. Chunga has pleaded guilty to the charges. Lee and Chunga face charges of conspiracy to commit securities and wire fraud, while Burton is charged with operating an unlicensed money-transmitting business. If convicted, they could face a maximum sentence of five years in federal prison.

The DOJ also highlighted that HyperFund operates under various aliases, including HyperTech, HyperCapital, HyperVerse, and HyperNation. Although cryptocurrency-related crimes are not rare, regulatory authorities have intensified efforts to combat scams and fraudulent schemes involving digital assets.

Recent reports indicate that over $1.7 billion in cryptocurrency was stolen in 2023 alone. Additionally, hackers exploited fake airdrops and scams targeting Solana holders, stealing over $4 million earlier this month. The DOJ, alongside other agencies, remains committed to deterring such illegal activities and safeguarding financial systems from exploitation.

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