The HyperVerse Crypto Scheme Scandal
An earlier investigation by Guardian Australia highlighted significant losses incurred by retail investors in the HyperVerse scheme, which has been labelled a potential “scam” and a “suspected pyramid scheme.” Chainalysis, in its 2022 crypto scam analysis, identified HyperVerse as a major wrongdoer, accumulating nearly $1.3 billion in revenue.
ASIC’s Oversight Scrutinised
Questions have been raised about the Australian Securities and Investments Commission’s (ASIC) oversight and response to international warnings. Concerns were voiced regarding ASIC’s apparent lack of vigilance, especially considering warnings issued by counterparts in the UK, New Zealand, Canada, Germany, and Hungary as early as 2021.
According to official statements from ASIC, this type of scheme operates by enticing unsuspecting individuals to invest in a potentially non-existent product, relying solely on funds from new investors, as highlighted by Jones, an ASIC official.
Elusive Scheme Chief and Previous Investigation
The HyperVerse scheme, affiliated with the HyperTech group, enticed investors with promises of lucrative returns that soon raised doubts about the legitimacy of the investment. Notably, an investigation by Guardian Australia suggested that Steven Reece Lewis, the alleged CEO of the potentially fraudulent scheme, may be a fictitious character, with no traceable presence.
The report also noted that HyperVerse was endorsed by Sam Lee and Ryan Xu, Australian entrepreneurs associated with the now-defunct Blockchain Global.
Regulatory Strategies Under Scrutiny
As the aftermath of the scandal unfolds, attention is increasingly focused on how ASIC will refine its regulatory strategies to prevent similar incidents in the future. This concern is heightened by a recent CertiK report, revealing 751 security incidents in 2023, resulting in a loss of approximately $1.8 billion in digital assets.