<\/p>\n
The U.S. Department of Justice (DOJ) announced on June 17 that Rodney \u201cBitcoin Rodney\u201d Burton, 56, of Miami, has pleaded guilty to conspiracy to operate an unlicensed money transmitting business related to the promotion of HyperFund.<\/span><\/p>\n The DOJ described HyperFund as a global cryptocurrency fraud scheme that took in approximately $1.8 billion from investors. <\/span>Burton\u2019s guilty plea<\/span><\/a> is the latest legal development in the lengthy federal investigation into the scheme.<\/span>\u00a0<\/span><\/a><\/p>\n Burton pleaded guilty in federal court to conspiracy to operate an unlicensed money transmitting business, related to his role in promoting HyperFund. According to the DOJ, the guilty plea is tied to activities taking place between June 2020 and January 2022, during which Burton and others provided money transmitting services to support the scheme.<\/span><\/p>\n In addition to his promotional role, the DOJ stated that Burton controlled several companies presented as consulting businesses, which in reality operated as unlicensed money transmitting businesses. These companies were used to process fund flows for HyperFund, while Burton directly benefited from money brought into the scheme by investors.<\/span><\/p>\n According to the plea agreement, Burton personally received at least $7,851,711 in proceeds from the unlicensed money transmitting operation, including money from HyperFund victims in Maryland. This figure is the amount the DOJ directly tied to Burton, separate from the $1.8 billion scale that the agency attributed to the entire HyperFund scheme.<\/span><\/p>\n He faces a maximum sentence of five years in federal prison. The sentencing hearing is scheduled for 11:00 AM on July 23 before U.S. District Judge Richard D. Bennett in Maryland.<\/span><\/p>\n HyperFund was promoted as a cryptocurrency investment platform that sold \u201cmembership packages\u201d to investors. According to the DOJ, promotional materials promised \u201cpassive returns\u201d of 0.5% to 1% daily until the initial investment doubled or tripled.<\/span><\/p>\n HyperFund claimed that payouts came from large-scale cryptocurrency mining operations. The SEC stated that the scheme also promoted associations with a Fortune 500 company. However, the DOJ said HyperFund did not have the mining operations as claimed, while the SEC alleged that the scheme had no real source of revenue other than investor funds.<\/span><\/p>\n According to the DOJ, HyperFund began blocking withdrawal requests in 2021. By 2022, the SEC stated the scheme had collapsed, leaving investors unable to withdraw their funds.<\/span><\/p>\n The DOJ announced the criminal case related to HyperFund in January 2024. The agency accused Sam Lee, an Australian citizen living in Dubai, of being a co-founder of the scheme; Burton and Brenda Chunga were also named in the filings.<\/span><\/p>\n According to the press release at that time, HyperFund was also known as HyperTech, HyperCapital, HyperVerse, and HyperNation. Chunga pleaded guilty to conspiracy to commit securities fraud and wire fraud. Lee was indicted for conspiracy to commit these two acts; the charges against him are not yet a court ruling. According to the <\/span>DOJ case page<\/span><\/a>, Chunga\u2019s sentencing hearing is currently scheduled for June 29, 2026.<\/span>\u00a0<\/span><\/a><\/p>\n On the same day, January 29, 2024, the SEC filed a civil lawsuit against Sam Lee and Brenda Chunga in federal court in Maryland. The agency alleged that HyperFund was a cryptocurrency pyramid scheme that raised more than $1.7 billion from global investors. The <\/span>SEC press release<\/span><\/a> described this as a parallel action to the DOJ\u2019s criminal case.<\/span>\u00a0<\/span><\/a><\/p>\n The complaint alleged that Lee and Chunga violated anti-fraud and registration provisions of the federal securities laws. The SEC seeks permanent injunctions, conduct-based injunctions prohibiting the defendants from participating in multi-level marketing or crypto offerings, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.<\/span><\/p>\n Chunga agreed to settle the civil charges, including an injunction against future violations; the amount of disgorgement and penalties will be determined by the court, and the agreement is subject to court approval. In its 2024 press release, the SEC stated that the charges against Lee will continue to be litigated in court.<\/span><\/p>\n<\/div>\nBitcoin Rodney Pleads Guilty<\/b><\/h2>\n
How HyperFund Worked<\/b><\/h2>\n
Other Defendants in the HyperFund Case<\/b><\/h2>\n
SEC\u2019s Separate Civil Action<\/b><\/h2>\n