U.S. authorities brought HyperFund cases over alleged $1.7 billion-plus scheme

U.S. authorities unveiled parallel civil and criminal cases on January 29, 2024 over HyperFund, a crypto-branded membership program that regulators and prosecutors alleged collected at least $1.7 billion worldwide while promising returns tied to mining operations that did not exist.

The Securities and Exchange Commission filed a civil complaint in the U.S. District Court for the District of Maryland against Xue Samuel Lee, also known as Sam Lee, and Brenda Indah Chunga, also known as Bitcoin Beautee. The SEC alleged fraud and unregistered offers and sales of securities. In a coordinated criminal announcement, the Justice Department disclosed an indictment against Lee, charges against promoter Rodney Burton, and Chunga’s guilty plea.

The two agencies used different totals. The SEC said HyperFund raised more than $1.7 billion; the Justice Department described a $1.89 billion scheme. The public records available on January 29 did not reconcile that difference, so the figures should be read as agency allegations under separate cases, not as interchangeable audited loss calculations.

How the membership system worked

According to the SEC complaint, HyperTech Group launched HyperFund in June 2020 and presented it as a decentralized-finance ecosystem. The program was rebranded as HyperVerse in approximately December 2021 and HyperNation in approximately May 2022.

Investors bought membership levels of $300, $500, $1,000 or $10,000 using Tether’s USDT token, the SEC alleged. Their account value appeared as internal “HyperUnits.” Promotional material promised passive rewards of 0.5% to 1% per day until a member earned as much as three times the initial investment. Members could also pursue accelerated rewards by recruiting other participants.

The SEC alleged that the program had no real revenue source beyond investor money. Its complaint said promoters invoked large-scale crypto mining, prominent business associations and media appearances to build credibility. It also alleged that Lee acknowledged in an early-2023 recorded call that the related group had exited bitcoin mining in 2019, before HyperFund launched.

Withdrawal mechanics added another layer of risk. The SEC said members generally had to convert HyperUnits into a token called Molecular Future, move that token to the HOO Exchange, exchange it for other crypto assets and then transfer those assets elsewhere to obtain fiat currency. The complaint alleged unresolved withdrawal problems in February and March 2022 and said HOO stopped working by November 2022. The Justice Department separately alleged that HyperFund began blocking some withdrawals by at least July 2021. Those are allegations, not findings made after trial.

Civil claims and criminal exposure

The SEC sought permanent and conduct-based injunctions, disgorgement, prejudgment interest and civil penalties. Chunga agreed to a settlement that remained subject to court approval, with monetary amounts to be determined. The SEC said its claims against Lee would be litigated.

The criminal posture was different. Lee was charged with one count of conspiracy to commit securities fraud and wire fraud. Burton was charged with conspiracy to operate, and operating, an unlicensed money-transmitting business. Chunga pleaded guilty on January 29 to conspiracy to commit securities fraud and wire fraud. The Justice Department emphasized that its indictment and complaint were allegations and that unconvicted defendants were presumed innocent.

Why January 29 mattered

The coordinated actions treated the same crypto-branded enterprise through several legal lenses at once: securities registration, civil fraud, wire fraud and money transmission. That breadth mattered for an industry still debating where digital-asset activity fit within existing U.S. rules.

The alleged misconduct was not a failure of USDT, bitcoin or a public blockchain protocol. On the event-day record, crypto assets functioned as the payment rail and marketing vocabulary for a multi-level membership structure. The sharper institutional lesson was that a “DeFi” label did not prevent authorities from applying established fraud and securities theories to fundraising, return promises and recruitment incentives.

The size of the alleged intake made the case consequential, but the January 29 filings did not establish recoverable victim losses, available assets or final liability for Lee and Burton. Those questions remained unresolved at the close of the event-day record.