Brenda Chunga, known online as “Bitcoin Beautee,” was the American face of an Australian Ponzi scheme called HyperFund.
Brenda Chunga is one of many scammers to meet their demise in the past year
Brenda Chunga, known online as “Bitcoin Beautee,” was the American face of an Australian Ponzi scheme called HyperFund.
Chunga made nearly $4 million promoting the scheme—which defrauded investors across the globe of $1.9 billion (pdf)—on social media, according to the US Securities and Exchange Commission (SEC). With her fortune, she bought a million-dollar house in her home state of Maryland, a million-dollar condo in Dubai, a BMW, and some designer handbags.
But it all came crashing down, and on Monday (Jan. 29), Chunga pled guilty to fraud in a federal court in Maryland. HyperFund’s co-founder, Australian citizen Sam Lee, was also charged. Another American promoter, Miami resident Rodney Burton, aka “Bitcoin Rodney,” was arrested the same day and is being detained. Chunga faces up to five years in prison; Burton could serve 10.
“The level of alleged fraud here is staggering,” said US attorney Erek L. Barron this week in the announcement of the charges by the Department of Justice (DoJ). “Whether it’s cryptocurrency fraud, or any other financial frauds, if it sounds too good to be true, it probably is.”
Crypto schemes have been on the rise since the pandemic, and HyperFund’s activities were put on blast by a Guardian Australia investigation at the end of last year. The charges against Chunga and Lee by the SEC and the DoJ, as well as Burton’s arrest, signal that the American crackdown on crypto isn’t finished.
Last year, federal regulators took action against the biggest cryptocurrency exchanges, Coinbase, FTX, and Binance, or their founders. In perhaps the most high-profile case, FTX founder Sam Bankman-Fried was convicted of stealing at least $10 billion from investors.
Other schemes were also exposed. A YouTuber was charged for defrauding investors of about $1 billion and using it to buy himself shiny things like Rolex watches. Federal and state investigators probed the founder of cryptocurrency lender Celsius over fraud concerns.
Smaller-scale scams haven’t been spared. Most recently (and surprisingly), a Colorado pastor of an online church was charged by the state’s Division of Securities for crypto fraud, after milking about $3 million from investors.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.