The arrest for Bitcoin fraud of Rodney

The United States has arrested “Bitcoin Rodney”, suspected of being the promoter of the HyperVerse cryptographic scheme, on charges of fraud against the IRS. 

Rodney Burton was detained on Friday in Florida and will be subsequently transferred to Maryland. Let’s see all the details below. 

The IRS fraud accusation against ‘Bitcoin Rodney’

As anticipated, US authorities have arrested and charged Rodney Burton for allegedly committing a fraud exceeding 7 million dollars through a deceptive investment scheme. 

The charges, filed by the Internal Revenue Service (IRS) of the United States on January 5th, indicate that Burton, also known as “Bitcoin Rodney,” has been indicted in Maryland for allegedly promoting the cryptographic investment scheme HyperVerse, as highlighted in the court documents.

HyperVerse, also known as Hyperfund, HyperCapital, and HyperNation, was an unincorporated organization founded around June 2020, as reported in the filing. 

According to the accusations of Andrew J. Accardi, special agent of the IRS Criminal Investigation Division, a network of HyperFund promoters has conducted fraudulent promotional presentations. 

In addition, he falsely claimed that investors would receive daily passive returns ranging from 0.5% to 1% until doubling or tripling their initial investment.

The deposit claims that Burton received 562 bank transactions or cashier’s checks, for a total of $7,851,711, from individuals. Burton’s arrest took place in Florida on Friday, with the announcement of his transfer to Maryland.

The investigation by Guardian Australia has revealed that the HyperVerse scheme has caused millions of dollars in losses to thousands of people. HyperTech, the entity behind the scheme, was managed by Steven Reece Lewis, whose existential status is doubted by the newspaper.

Stephen Jones, assistant treasurer and Australian Minister for Financial Services, has announced the intention to question the country’s Securities and Investments Commission (ASIC) about the failure to warn consumers about the crypto scheme HyperVerse, distinguishing itself from other nations.

Crypto investments in Australia: the collapse of HyperFund and HyperVerse 

As already mentioned above, hundreds of investors have suffered million-dollar losses in Australia due to cryptocurrency investment schemes, as revealed by an investigation by The Guardian Australia.

Despite the warnings from international financial authorities about two of these schemes, HyperFund and HyperVerse, investors have suffered severe financial damages.

The founders of these schemes, Sam Lee, previously known as “the bitcoin prince” in Australia, and Zijing “Ryan” Xu, self-proclaimed “one of the four kings of bitcoin in China,” are also co-founders of the Australian company Bitcoin, Blockchain Global.

This latter was placed under administration in 2021, with a debt of 58 million dollars owed to creditors.

The liquidator of Blockchain Global, in October, referred Lee and Xu to the Australian Securities and Investments Commission (ASIC), suspecting that they had violated the Corporations Act. 

However, the report reveals that Lee and Xu’s examination has been hindered by the fact that the two reside abroad, making it difficult to serve the citations.

The Guardian Australia has also discovered that, apart from Blockchain Global, Lee and Xu have promoted various cryptocurrency investment schemes since 2018, many of which appear to have failed, leaving investors unable to recover their funds.

The collapse of these schemes has raised concerns about the ability of Australian regulatory authorities to warn investors about high-risk schemes and possible scams. 

Chris Berg, director of RMIT’s Blockchain Innovation Hub, highlighted a lack of skills in regulatory authorities regarding cryptocurrencies. Furthermore, he emphasized the need for greater education on the nature of scams in general.

Doubts about credentials and legitimacy escaped regulatory control

The controversial investment scheme HyperVerse is causing concerns in Australia. This has escaped the control of regulatory authorities despite foreign warnings labeling it as a possible “scam” or “suspected pyramid scheme”.

Sam Lee, who denies the label of fraud and claims the foundation of HyperVerse, is confronted with the silence of Zijing “Ryan” Xu.

Steven Reece Lewis has been introduced as the CEO of HyperVerse, supported by video messages from celebrities like Steve Wozniak and Chuck Norris. 

The promotional material praised Lewis’s academic and professional credentials, but Guardian Australia found no trace of him at the University of Leeds or the University of Cambridge. 

Let alone in the records of UK companies or the United States Securities and Exchange Commission. 

The job statements at Goldman Sachs, the sale of a company to Adobe, and the launch of an IT start-up have remained unconfirmed.

HyperVerse connects its predecessor, HyperFund, in a series of cryptographic schemes under the Hyper brand. Sam Lee, president of the HyperTech group, and Xu, founder of the group, were introduced at a launch event.

The statements made by HyperVerse about Reece Lewis are not supported, as Adobe and Goldman Sachs do not confirm his statements. 

In addition, no LinkedIn profile or other online presence is traceable, except for an inactive Twitter account specifically created to promote the scheme.