Promoter of HyperVerse Crypto Scheme Arrested in US
Rodney Burton, also known as “Bitcoin Rodney,” has been arrested in Florida and charged in the US for his alleged involvement in the HyperVerse crypto investment scheme. According to court documents, Burton was part of a network that made fraudulent presentations to investors and potential investors. He has been charged with operating and conspiring to operate an unlicensed money transmitting business. Despite multiple consumer warnings from financial authorities, this is the first time charges have been laid against anyone involved in the HyperVerse scheme.
“Bitcoin Rodney” Charged for Role in Fraudulent Investment Scheme
Rodney Burton, who goes by the name “Bitcoin Rodney,” was arrested in Florida and charged for his alleged role in the fraudulent HyperVerse investment scheme. The US Internal Revenue Service (IRS) alleges that Burton was a promoter of the scheme, which generated revenue from bitcoin mining that the IRS claims did not exist. The scheme operated under various names, including HyperTech, HyperCapital, HyperVerse, and HyperNation. Promoters of these schemes made fraudulent presentations to investors, promising daily rewards of up to 1%, which were allegedly paid with funds collected from more recent investors.
IRS Alleges HyperVerse Promoters Made Fraudulent Presentations
The US Internal Revenue Service (IRS) alleges in court documents that a network of promoters of the HyperVerse schemes made fraudulent presentations to investors and potential investors. The scheme, which claimed to operate a legitimate decentralized finance (DeFi) cryptocurrency investment platform, promised investors daily rewards of up to 1% until their initial investment doubled or tripled in value. The IRS alleges that these promised returns were funded using funds collected from more recent investors, rather than revenue generated from large-scale crypto mining operations, which the scheme claimed to have.
Australian Link to HyperVerse Scheme Revealed
An investigation by The Guardian has revealed the links between the HyperVerse scheme and Australian individuals Sam Lee and Ryan Xu, who were directors of the collapsed blockchain company Blockchain Global. Lee, the chairman of the HyperTech group, and Xu, the group’s founder, were featured prominently in online promotional material for the Hyper schemes. Despite these links, the Australian Securities and Investments Commission (ASIC) has said that it does not intend to take action against Lee and Xu at this time.
HyperFund Promoter Received Over $7.8 Million from Investors, Court Documents Show
According to court documents, Rodney Burton, a promoter of the HyperFund investment scheme, received over $7.8 million from investors who wished to invest in HyperFund. The US Internal Revenue Service (IRS) analyzed Burton’s personal and company bank records, which showed 562 wire transfers or cashier’s checks from individuals looking to invest in HyperFund. The affidavit also claims that HyperFund began blocking people from making withdrawals in mid-2021, and Burton transferred worthless hyper units to investors’ accounts instead of fiat currency. It is alleged that Burton used funds from more recent investors to pay off earlier investors, suggesting a Ponzi scheme-like operation.
Analyst comment
Positive news: None
Negative news: # Promoter of HyperVerse Crypto Scheme Arrested in US, “Bitcoin Rodney” Charged for Role in Fraudulent Investment Scheme, IRS Alleges HyperVerse Promoters Made Fraudulent Presentations, Australian Link to HyperVerse Scheme Revealed, HyperFund Promoter Received Over $7.8 Million from Investors.
Neutral news: None
As an analyst, the market is likely to be negatively affected by the news as it highlights fraudulent activities and schemes within the crypto industry. It may lead to increased skepticism and caution among investors, potentially decreasing confidence and investment in similar projects. There may be increased regulatory scrutiny and actions to prevent such schemes in the future.
