The U.S. Securities and Exchange Commission (SEC) has taken legal action against Xue Lee, known better as Sam Lee, and Brenda Chunga, alias Bitcoin Beautee, for their involvement in a fraudulent cryptocurrency pyramid scheme called HyperFund. The scheme managed to raise over $1.7 billion from crypto investors worldwide.
According to the SEC’s complaint, Lee and Chunga actively promoted HyperFund “membership” packages, making claims of guaranteed high returns. They stated that these returns would be generated through HyperFund’s alleged crypto asset mining operations and its affiliations with a Fortune 500 company.
The SEC claims that Xue Lee and Brenda Chunga were either fully aware or showed that they didn’t seem to care that HyperFund was operating as a pyramid scheme, and they were aware that it relied solely on money from new investors as its main source of income.
The HyperFund scheme resulted in losses for many investors who could not recover their funds after its collapse. In response, the SEC filed a complaint in the Maryland District Court, alleging that both Lee and Chunga violated federal securities laws by engaging in fraudulent and unregistered activities.
The SEC seeks solutions in its complaint, which involve a permanent ban to stop the defendants from engaging in multi-level marketing or cryptocurrency-related activities based on their behavior. The SEC aims to recover profits obtained through wrongdoing, charge interest on these gains before judgment, and handset financial penalties.
Brenda Chunga has agreed to settle charges related to the HyperFund scheme, agreeing to a permanent injunction and taking responsibility for disgorgement and civil penalties, pending court approval.
The U.S. Attorney’s Office in Maryland also has filed criminal charges against Brenda Chunga and Xue Lee.
Chunga has already pleaded guilty to committing securities and wire fraud. This case underscores regulatory efforts to curb cryptocurrency fraud, emphasizing the need to protect investors and remain vigilant in the digital asset industry.
 Also Read: SEC Charges Ex-Corrections Department Officer In Crypto Scam
