Federal prosecutors in Maryland have charged three individuals with a $1.89 billion cryptocurrency Ponzi scheme. The accused are Australian citizens Sam Lee and Rodney Burton, also known as Bitcoin Rodney, and Brenda Chunga, who goes by the alias Bitcoin Beautee.
Allegations against them include defrauding investors via cryptocurrency mining operations that did not exist. Chunga has entered a guilty plea, and Burton is held in custody awaiting trial.
The trio allegedly promised investors substantial returns via HyperFund, a cryptocurrency investment platform that now expires after its collapse in 2022.
Investors were led to believe they could earn up to 1% in daily passive rewards, doubling or tripling their initial investments through large-scale mining operations that never existed. The operation primarily generated income from new investor funds, fitting the characteristics of a Ponzi scheme.
Having pleaded guilty, Chunga is awaiting sentencing scheduled for March. Burton faces charges related to operating an unlicensed money-transmitting business. Lee, implicated as a co-owner of the failed Blockchain Global, faces up to five years if sentenced for planning to commit securities fraud and wire fraud.
The SEC has also taken action, securing a restraining order against Chunga from participating in future cryptocurrency marketing and mandating forfeiture of profits derived from the scheme.
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