The U.S. Division of Justice (DOJ) introduced on June 17 that Rodney “Bitcoin Rodney” Burton, 56, of Miami, has pleaded responsible to conspiracy to function an unlicensed cash transmitting enterprise associated to the promotion of HyperFund.
The DOJ described HyperFund as a world cryptocurrency fraud scheme that took in roughly $1.8 billion from traders. Burton’s responsible plea is the newest authorized improvement within the prolonged federal investigation into the scheme.
Bitcoin Rodney Pleads Responsible
Burton pleaded responsible in federal courtroom to conspiracy to function an unlicensed cash transmitting enterprise, associated to his function in selling HyperFund. In response to the DOJ, the responsible plea is tied to actions happening between June 2020 and January 2022, throughout which Burton and others offered cash transmitting providers to assist the scheme.
Along with his promotional function, the DOJ acknowledged that Burton managed a number of firms offered as consulting companies, which in actuality operated as unlicensed cash transmitting companies. These firms had been used to course of fund flows for HyperFund, whereas Burton instantly benefited from cash introduced into the scheme by traders.
In response to the plea settlement, Burton personally obtained not less than $7,851,711 in proceeds from the unlicensed cash transmitting operation, together with cash from HyperFund victims in Maryland. This determine is the quantity the DOJ instantly tied to Burton, separate from the $1.8 billion scale that the company attributed to your complete HyperFund scheme.
He faces a most sentence of 5 years in federal jail. The sentencing listening to is scheduled for 11:00 AM on July 23 earlier than U.S. District Decide Richard D. Bennett in Maryland.
How HyperFund Labored
HyperFund was promoted as a cryptocurrency funding platform that bought “membership packages” to traders. In response to the DOJ, promotional supplies promised “passive returns” of 0.5% to 1% each day till the preliminary funding doubled or tripled.
HyperFund claimed that payouts got here from large-scale cryptocurrency mining operations. The SEC acknowledged that the scheme additionally promoted associations with a Fortune 500 firm. Nevertheless, the DOJ mentioned HyperFund didn’t have the mining operations as claimed, whereas the SEC alleged that the scheme had no actual income aside from investor funds.
In response to the DOJ, HyperFund started blocking withdrawal requests in 2021. By 2022, the SEC acknowledged the scheme had collapsed, leaving traders unable to withdraw their funds.
Different Defendants within the HyperFund Case
The DOJ introduced the legal case associated to HyperFund in January 2024. The company accused Sam Lee, an Australian citizen residing in Dubai, of being a co-founder of the scheme; Burton and Brenda Chunga had been additionally named within the filings.
In response to the press launch at the moment, HyperFund was often known as HyperTech, HyperCapital, HyperVerse, and HyperNation. Chunga pleaded responsible to conspiracy to commit securities fraud and wire fraud. Lee was indicted for conspiracy to commit these two acts; the fees towards him usually are not but a courtroom ruling. In response to the DOJ case web page, Chunga’s sentencing listening to is presently scheduled for June 29, 2026.
SEC’s Separate Civil Motion
On the identical day, January 29, 2024, the SEC filed a civil lawsuit towards Sam Lee and Brenda Chunga in federal courtroom in Maryland. The company alleged that HyperFund was a cryptocurrency pyramid scheme that raised greater than $1.7 billion from international traders. The SEC press launch described this as a parallel motion to the DOJ’s legal case.
The grievance alleged that Lee and Chunga violated anti-fraud and registration provisions of the federal securities legal guidelines. The SEC seeks everlasting injunctions, conduct-based injunctions prohibiting the defendants from collaborating in multi-level advertising and marketing or crypto choices, disgorgement of ill-gotten beneficial properties, prejudgment curiosity, and civil penalties.
Chunga agreed to settle the civil expenses, together with an injunction towards future violations; the quantity of disgorgement and penalties will probably be decided by the courtroom, and the settlement is topic to courtroom approval. In its 2024 press launch, the SEC acknowledged that the fees towards Lee will proceed to be litigated in courtroom.
