Dear ladies and gentlemen, here’s an intriguing story about Hyperfund, a company that collapsed amidst scandal and allegations of fraud. You see, there has never been a time when cases of pyramid and Ponzi schemes have been as prevalent as during the COVID-19 era.
A lot of such schemes came up during that period, leaving many people with significant financial losses later. In fact, many scam victims who reach out to us for help are those who lost money to fraudsters between 2019 and 2022, which essentially was the pandemic period.
One particular case that seriously drew our attention over the last few months was Hyperfund. We reported and filed countless complaints to the authorities against this firm on behalf of its victims.
As things stand currently, there seems to be light at the end of the tunnel. There’s a high likelihood that these folks will recover their funds, even if partially. The government has tracked down and apprehended the masterminds of Hyperfund.
The Hyperfund Review
For those who don’t know, Hyperfund, which has since ceased operations, was a crypto asset-related Ponzi scheme on a global scale. Through this fraudulent multi-level marketing fraud, the individuals behind it were able to collect over $1.7 billion from victims globally.
The well-organized pyramid scheme was launched in June 2020 at the height of the pandemic through a company known as “HyperTech Group.” HyperTech Group was allegedly founded by a guy called Xue Lee also known as Sam Lee and other individuals whose identities are not in the public domain.
Lee is an Australian citizen and also a resident of Dubai, United Arab Emirates.
Here’s where it begins to get interesting, HyperTech Group also known as “Group Limited”, which was the parent company of Hyperfund was incorporated in the Seychelles, an offshore destination, on April 1, 2020, about three months or so before HyperFund. The questionable company purportedly operated in Hong Kong.
HyperTech Group was also said to be the parent company of four other blockchain-related companies besides HyperFund:
- DigitalX—www.digitalx.com.
- HyperCash formerly known as “Hcash”—h.cash.
- Blockchain Global Ltd—blockchain.global.
- CollinStar Capital—collinstar.com.
Surprisingly, these HyperTech Group subsidiaries, except HyperFund, are still active. You need to proceed with caution when it comes to these firms, given their relationship with HyperTech Group, the parent company of HyperFund, a firm that has since been shut down due to fraud.
HyperFund’s Conflicting Goals
In the beginning, HyperFund purported to be a project aimed at creating a decentralized finance ecosystem. Later on, the objective changed to a populist-focused one. The company announced that it was leveraging blockchain technology to create a decentralized government to overcome societal inequality and injustice, a different goal altogether.
Companies that state conflicting goals have financial incentives that are not aligned with the best interests of their clients. In many cases, these entities turn out to be scams.
HyperFund’s Misrepresentation Tactics
Mr.Lee and his marketers promoted the company’s so-called “membership” packages, which were also referred to as investment contracts aggressively online.
He and Rodney Burton alongside Brenda Chunga promised investors high returns from purported massive crypto mining operations. Lee and his company’s promoters even promised investors daily returns of between 0.5% and 1%, further claiming that their funds could even triple in under 2 years.
To attract more people, they implemented a referral system, rewarding existing members who brought in new investors.
As expected, members of the public invested in the company by buying the “smart contracts” at various levels. The company valued the four membership levels at $300, $500, $1,000, and $10,000 in ascending order. People would buy these membership packages through a special link provided by the company.
However, the reality is that HyperFund wasn’t mining crypto assets contrary to its founders’ claims and there were no returns to give to investors. Instead, it was all a pyramid or Ponzi scheme without a real revenue source other than investors’ funds.
The company even hired an actor to pretend to be its new CEO at some point. As if that were not enough, Mr. Lee and his team even claimed association with a top-tier corporation to earn even more credibility.
HyperFund Eventually Collapsed
Without legitimate revenue sources, Hyperfund paid investor withdrawals using new investors’ deposits, which was clearly a non-sustainable payment approach. Being unable to sustain the approach, the company later blocked the withdrawals, causing widespread panic and frustration among investors. Consequently, it collapsed, leaving investors financially ruined and devastated.
The US Securities and Exchanges Commission Took Action
The SEC is an agency of the American government constitutionally mandated to regulate and oversee the players in the securities industry to protect investors and maintain fair markets. These players include brokers, dealers, exchanges, investment advisors, and mutual funds.
In early 2024, the U.S. Securities and Exchange Commission (SEC) brought charges against the founders and promoters. Brenda Chunga in particular agreed to settle the civil charges leveled against her by the commission. As part of the settlement, she accepted to return more than $3.7 million she obtained from investors fraudulently.
Fell Victim To HyperFund Or Another Fraudulent Scheme?
If so, and you have evidence(proof of payment/s and communication, go to this page to report the incident and seek help. Alternatively, send us an email to scamread@scamreader.info.