$1.89B Cryptocurrency Scheme Busted by DOJ
The U.S. Department of Justice has announced significant charges against three individuals involved in a $1.89 billion cryptocurrency fraud scheme.
The indictment, which was unsealed on Monday, has named Australian citizen Sam Lee, residing in Dubai, along with Rodney Burton of Miami and Brenda Chunga of Maryland. The trio is accused of orchestrating the massive fraud through HyperFund.
False promises
According to Acting Assistant Attorney General Nicole M. Argentieri, the defendants allegedly lured investors with false promises of substantial returns from nonexistent cryptocurrency mining operations. This alarming revelation underscores the growing concern over deceptive practices in the rapidly evolving digital asset market.
Gamza KhanzadaevThe indictment outlines that from June 2020 to November 2022, Lee and his co-conspirators allegedly sold fraudulent investment contracts via HyperFund's online platform, promising daily passive rewards leading to doubled or tripled investments.
However, these claims were baseless, as HyperFund lacked the purported crypto-mining operations.
Increasing DOJ vigilance in crypto fraud
The DOJ has ramped up its efforts in cracking down on cryptocurrency fraud. Recent months have seen a series of high-profile cases.
In a notable case from November 2023, Miami's Esteban Cabrera Da Corte was sentenced to 63 months in prison for participating in a scheme defrauding U.S. banks of $4 million. Another significant case involved the founder of Oyster Pearl, "Bruno Brock", who was handed a 4-year jail term in November 2023 for evading taxes amounting to over $5.5 million. Additionally, in July 2023, the DOJ arrested engineer Shakeeb Ahmed for stealing $9 million from a Solana-based crypto exchange through a flash loan attack.
The DOJ's actions are part of a broader effort to establish clear boundaries and regulatory frameworks in the cryptocurrency industry.
The SEC continues to wrestle with defining the status of various tokens and facing legal challenges in its enforcement actions, but the DOJ's criminal prosecutions have brought swift and decisive outcomes. This approach not only deters potential fraudsters but also brings a sense of stability and security to investors navigating the complex and often volatile world of cryptocurrencies.
Godfrey Benjamin
Gamza Khanzadaev
Dan Burgin
Vladislav Sopov