A promoter of the HyperVerse cryptocurrency investment scheme has been arrested and charged in the US for his alleged role in the scheme, with court documents alleging he was part of a network that made “fraudulent promotions” to investors and potential investors.
Rodney Burton, who goes by the nickname “Bitcoin Rodney,” was arrested in Florida on Friday and remains in custody awaiting transport to Maryland, where he has been charged. He was charged with operating and conspiring to operate an unlicensed money transfer company.
The IRS alleges in court documents that a network of hyper scheme promoters made “fraudulent promotions” for an investment operation that generated revenue from Bitcoin mining, which the IRS claims does not exist.
This is the first time charges have been brought against anyone involved in the HyperVerse scheme.
An investigation by The Guardian revealed the scheme’s links to Australian Sam Lee and his business partner Ryan Shaw, two directors of Australian blockchain company Blockchain Global, which collapsed owing $58 million to its creditors.
Li was chairman of HyperTech Group, while Xu was listed as the group’s founder. The two men featured prominently in online promotional materials for Hyper’s plans, with both speaking as part of the HyperVerse global launch event in December 2021.
The HyperVerse scheme has been the subject of multiple consumer warnings from financial authorities around the world, but has escaped the attention of regulators in Australia.
Lee and
Neither Lee nor Shaw are mentioned in US court documents related to the criminal complaint against Burton.
Lee did not respond to a request for comment on the arrest. Can’t contact Xu.
Burton’s appointed public defender also did not respond to The Guardian’s request for comment by press time.
In an affidavit in support of the criminal complaint and arrest warrant filed in U.S. District Court in Maryland, IRS Special Agent Andrew Accardi alleges that Burton was a promoter of HyperFund, which also operates under the names HyperTech, HyperCapital, HyperVerse and HyperNation.
Court documents, published by Courtwatch.news and seen by The Guardian, refer to all the schemes collectively as the HyperFund.
The affidavit alleges that an IRS analysis of Burton’s personal and banking records shows that from June 2020 to January 2022, Burton received 562 wire transfers or bank checks, totaling $7,851,711, from individuals who wanted to invest in the HyperFund.
The affidavit also explains how the alleged scheme worked.
“HyperFund ran an allegedly legitimate decentralized financial platform, or DeFi,” says Accardi.
“A network of HyperFund promoters… made fraudulent promotions to investors and potential investors. In those presentations, the promoters touted HyperFund’s investment programs, including the purported returns that potential investors could earn from investing in HyperFund. Potential investors have been told they can buy “membership” into “the world’s most sustainable passive rewards programme”.
The scheme falsely claimed that investors who purchased memberships would receive daily bonuses ranging from 0.5% to 1% per day, until the value of the investor’s initial investment had doubled or tripled, the affidavit alleges.
“To convince investors that HyperFund could repay these daily payouts of passive rewards, HyperFund claimed that its payouts would be generated in part from revenues generated by large-scale cryptocurrency mining operations,” the affidavit says.
“In reality, HyperFund did not have any such operations. To the extent that investors saw any bonuses due, these investors were paid with funds raised from more recent investors.
A scheme that uses the money of later investors to pay off early investors is known as a Ponzi scheme, although that term is not used in court documents.
Accardi also claims that of the 562 documented payments, 342 were made after HyperFund began blocking people from being able to make withdrawals in mid-2021.
“In other words, in and after July 2021, Burton took investors’ fiat currency and transferred worthless HU (hyperfund units) from his HyperFund account to investors’ HyperFund accounts.”
Burton, a 54-year-old American, has promoted his wealth across various social media channels, including boasting in March 2022 that he had bought two Rolls Royce cars on the same day.
He also recorded himself shopping for a $3.5 million yacht, and claims to have purchased a $1.4 million diamond-encrusted Audemars Piguet watch.
In February 2021, Burton posted photos on social media of himself with Ryan Shaw in Dubai, calling him a “multi-billionaire” and “amazing human being.”
In a video posted online of Shaw speaking at a Lunar New Year dinner with Burton, Shaw says, “We will change the world together.” Shaw says he decided to travel to Dubai to meet with HyperFund promoters because it was a “very special moment.”
“You guys have traveled so many hours here to Dubai, so I think I should step up and at least make everyone think that we are a family, we are united and we will change the world together.”
When asked about the future of HyperFund, Shaw said: “We are trying to revolutionize the entire financial system.”
“If we come together and join the same platform, and we can have the same idea and then we can have the same consensus, and continue to recruit our army, and one day, if our army reaches a billion people, the whole world belongs.” for us. This is our vision.”
The plan is “very exciting,” Burton says in the video.
During the Dubai trip, Burton bragged in social media posts about eating steak covered in 24-karat gold and claimed to have received $1,000 from “the owner and founder of my current cryptocurrency software” for a Lunar New Year gift, along with a “cute monte.” Blank pen from our management team.”
He also went on a shopping spree in Dubai, where he showed off his purchases from a range of luxury brands, including Louis Vuitton and Balenciaga.