Three charged in federal probe of HyperFund crypto firm; indictment in Maryland outlines $1.89B scheme – Baltimore Sun

Federal court records unsealed Monday in Baltimore detail what prosecutors described as a $1.89 billion cryptocurrency fraud scheme and charges against three people, including a former Severna Park resident.

In a federal probe of HyperFund, a troubled cryptocurrency venture that authorities said duped investors on a global scale, prosecutors accused Brenda Chunga of selling fraudulent investment contracts through the venture’s online platform. In a social media video, Chunga described the business as “the world’s most sustainable passive rewards program” several months before it started blocking clients from making withdrawals, according to court records.

State property records say Chunga sold her home in Severna Park for $1.25 million in December.

Purporting to be “legitimate decentralized finance,” the venture that also went by names such as HyperTech, HyperCapital, HyperVerse and HyperNation was a “global securities fraud and wire fraud scheme” that netted nearly $1.89 billion over the course of two years starting in 2020, according to a separate indictment against Australian blockchain entrepreneur Sam Lee, a 35-year-old who investigators said co-founded the venture. That indictment says Chunga, who sometimes went by “Bitcoin Beautee,” promoted the venture while she lived in Maryland. It was not immediately clear if she had relocated after selling her Severna Park home.

The company claimed during a 2021 presentation that those who purchased “memberships” would receive between 0.5% to 1% daily in “passive rewards,” doubling or tripling their investment with payouts funded by the business’s “large-scale crypto mining operations” that didn’t actually exist, according to Lee’s indictment.

Investors were paid their rewards in “HU,” or “Hyper Units,” a trading currency that the business claimed was equivalent to the U.S. dollar, an IRS criminal investigations agent wrote in an affidavit supporting Maryland charges against Miami resident Rodney Burton. The 54-year-old, who also went by “Bitcoin Rodney,” was arrested Jan. 4 in Florida on his Maryland-based charges of conspiracy to operate an unlicensed money transmitting business, according to court records.

Around the summer of 2021, the venture began to block investors from making withdrawals, as regulators in multiple countries started to issue warnings to consumers regarding the company. Subsequent investigations by The Guardian’s Australian wing found that there didn’t seem to be any record of HyperFund’s purported executive existing and that the scheme targeted investors in developing countries who felt “suicidal” once they were blocked from withdrawing their funds.

None of the three defendants had attorneys listed in court records, and none had hearings scheduled yet, immediately after their cases were unsealed Monday morning.

This article will be updated.