Why HyperFund’s Crypto Scheme Was Doomed to Fail

HyperFund was a crypto asset platform that claimed to offer investors high returns from various projects related to blockchain, DeFi, and digital currencies. The platform, which was launched in 2020, was operated by HyperTech Group, a Hong Kong-based company that also ran other similar schemes such as HyperVerse and HyperNation. HyperFund claimed to have partnerships with Fortune 500 companies and leading blockchain firms, and to use advanced technology and artificial intelligence to generate profits.

HyperFund attracted investors by offering them membership packages that ranged from $300 to $1,000. The packages gave investors access to rewards and benefits such as daily income, referral bonuses, discounts, and voting rights. HyperFund promised to pay investors 10% of their initial investment every day for 600 days, which amounted to a 6,000% return. HyperFund also encouraged investors to recruit others to join the platform and earn commissions.

Why HyperFunds Crypto Scheme Was Doomed to Fail

HyperFund collapsed amid regulatory scrutiny and withdrawal issues

However, HyperFund’s promises were too good to be true. The platform was actually a fraudulent pyramid scheme that had no real source of revenue other than the money it received from new investors. HyperFund did not have any legitimate projects or partnerships, and did not use any sophisticated technology or artificial intelligence. HyperFund was simply paying old investors with the money from new investors, and keeping most of the funds for itself.

HyperFund’s scheme began to unravel in 2022, when several regulators around the world warned the public about its illegal and risky nature. The US Securities and Exchange Commission (SEC) filed a lawsuit against HyperFund’s co-founders, Xue Lee and Brenda Chunga, for securities fraud and wire fraud. The UK Financial Conduct Authority (FCA) issued a consumer alert about HyperFund, calling it a possible scam. The Central Bank of Nepal also banned HyperFund, along with other crypto schemes, for deceiving the public and causing illegal capital flight.

As the regulatory pressure mounted, HyperFund started to face problems with its withdrawal system. Many investors reported that they were unable to withdraw their funds from the platform, or that they received less than what they expected. Some investors also said that they were locked out of their accounts, or that their accounts were deleted. HyperFund blamed the withdrawal issues on technical glitches, server upgrades, and cyberattacks, and asked investors to be patient and trust the platform. However, these were just excuses to delay and avoid paying investors.

In 2023, HyperFund collapsed completely, leaving millions of investors stranded and devastated. HyperFund’s website and social media accounts were shut down, and its co-founders and promoters disappeared. The SEC estimated that HyperFund had raised more than $1.7 billion from investors, and had paid out only about $400 million. The rest of the money was either stolen by HyperFund, or frozen by authorities.

HyperFund’s failure shows the dangers of crypto schemes

HyperFund’s failure is a stark reminder of the dangers of investing in crypto schemes that promise unrealistic and unsustainable returns. These schemes are often unregulated, opaque, and fraudulent, and they exploit the ignorance and greed of investors who are lured by the hype and fear of missing out on the crypto boom. These schemes are also vulnerable to hacking, scamming, and regulatory crackdowns, and they can collapse at any time, leaving investors with nothing.

Investors who want to invest in crypto assets should be careful and informed, and should research the background, reputation, and legality of the platforms and projects they are interested in. They should also diversify their portfolio, limit their exposure, and manage their risks. They should also avoid any platforms or projects that offer guaranteed, fixed, or excessive returns, or that require recruitment or upfront payments. These are usually red flags that indicate a scam or a pyramid scheme.

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