Last updated on August 31st, 2025 at 01:15 pm
The U.S. Securities and Exchange Commission (SEC) charged popular crypto influencers Brenda Chunga and Xue Lee for their alleged involvement in a digital asset fraud.
According to a release published on its official website on Monday, January 29, 2024, the securities regulator accused Lee of operating a fraudulent cryptocurrency asset pyramid scheme known as HyperFund, which lured investments totalling $1.7 billion from unwitting investors into Bitcoin mining and a metaverse crypto project.
As per the SEC’s complaint, both Lee and Chunga advertised a HyperFund “membership” package, which assured investors of high returns, including HyperFund’s purported crypto mining operations and connections with a notable Fortune 500 organization. However, the agency noted that HyperFund has no revenue source other than the capital obtained from investors. Thus, its collapse in 2022 trapped the funds of investors, making them unable to withdraw their funds until today.
Gubir S. Grewal, the SEC’s Director of Enforcement, noted that Chunga and Lee’s act was out of pure deception, as the organizers only capitalized and profited from investors’ funds. He added that this action underscores how noncompliance in the cryptocurrency industry spurs investment schemes where organizers capitalize on the promise of get-rich-quick schemes without offering extensive investor protection disclosures demanded by the federal securities laws.
Despite the severity of the scam, Lee faces a five-year maximum sentence, while Chunga will pay a fine and stand a chance of avoiding prison if she pleads guilty. Chunga still resides in the United States, while Lee, who moved to Dubai in 2021, would require extradition to face the charges.
Meanwhile, the Estonian government has overruled a restriction ordered by a Tallinn circuit court and permitted the HashFlare co-founders Sergei Potapenko and Ivan Turõgin to be extradited to the United States, per a report from local news platform, Potimees.
The U.S. SEC also charged the duo for their involvement in HashFlare, a $575 million Ponzi scheme, in 2022, but they have been prevented from facing the charges in a U.S. court by the local Estonian court’s order.
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