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  • šŸ‘Øā€āš–ļø SEC Charges HyperFund in $1.7B Ponzi Scheme

šŸ‘Øā€āš–ļø SEC Charges HyperFund in $1.7B Ponzi Scheme

Plus: Google's Ad Policy Might Boost Bitcoin ETF Ads while Quantum Cats Botches Ordinals Launch

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Est. read time: 4 minutes

Who doesnā€™t love seeing a ponzi scheme get what they deserve?

Letā€™s digest:

1. SEC Charges HyperFund as a $1.7 Billion Ponzi Scheme  

2. Googleā€™s Policy Update May Boost Advertising for Bitcoin ETFs

3. Quantum Cats NFT Sales Held Up By Technical Difficulties

šŸ“ˆ MARKETS

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šŸ“° TODAYā€™S TOP STORY

SEC Charges HyperFund as $1.7 Billion Ponzi Scheme

HyperFund

The SEC has charged the founders of the HyperFund, Xue Lee and Brenda Chunga for orchestrating a fraudulent operation that amassed over $1.7 billion from global investors.

The scheme, which operated from June 2020 through early 2022, was charged with fraud and offering unregistered securities.

  • According to the SEC, Lee and Chunga falsely advertised HyperFund ā€œmembership packagesā€ as a guarantee to high returns from their lucrative investment in mining operations.

  • However, the SEC alleges that the scheme was, in reality, a pyramid scheme devoid of any legitimate revenue sources.

  • This misrepresentation led to the scheme's collapse in 2022, resulting in significant losses for investors.

ā€œAs alleged in our complaint, Lee and Chunga attracted investors with the allure of profits from crypto asset mining, but the only thing that HyperFund mined was its investorsā€™ pockets,ā€

- Gurbir Grewal, Director of SEC Division Enforcement

Chunga has responded to the allegations by pleading guilty to conspiracy charges related to securities fraud and wire fraud.

He has also agreed to settle the SEC charges, with the court set to determine the amount for disgorgement and civil penalties.

The SEC Being the Good Guys

As much as the SEC have seemed like the bad guys over the past year, this is the reason they do what they do.

Possibly the largest barrier to mass use of crypto products is due to itā€™s unregulated nature, which leads to $1.7B scams like HyperFundā€¦

Go Deeper: Read the full Press Release from the SEC here

šŸ¦ ETF

Googleā€™s Policy Update May Boost Bitcoin ETF Advertising

Google Ads

Google has updated its advertising policies, potentially opening the door for Bitcoin ETFs to be advertised on its platform.

If youā€™ve been under an ether rock, the SEC approved 11 spot Bitcoin ETFs on January 10 from firms such as BlackRock, Grayscale, and Fidelityā€¦

  • The policy change will permit ads from entities offering Cryptocurrency Coin Trusts targeting the United States.

  • This aligns with the nature of spot Bitcoin ETFs (investors purchase shares representing a stake in the fund's Bitcoin holdings) fitting Googleā€™s criteria for products involving digital currency trusts.

  • The platform's extensive reach and high search processing capacity, handling over 100,000 searches per second.

The Grayscale Bitcoin Trust, one of the largest Bitcoin trusts, has transitioned to a spot Bitcoin ETF, aligning with the SECā€™s recent approvals.

Before it was only for accredited investors (people with a $1M net worth or more) but now itā€™s more widely available as a spot ETF, potentially making them a safer option for Googleā€™s ad platform

 šŸŸ  Ordinals

Quantum Cats NFT Sales Held Up By Technical Difficulties

Quantum Cats

Taproot Wizards' big debut with their "Quantum Cats" Bitcoin Ordinalss hit a bit of a bump on Monday.

They were set to release around 3,000 digital felines into the wild, each priced at 0.1 BTC (that's $4,300 for the non-math wizards), but tech troubles threw a wrench in the works.

  • Aimed to celebrate the Bitcoin improvement proposal known as OP_CAT, they were scheduled to begin with a two-hour whitelist window, but was postponed to today due to server overload.

  • Despite the technical challenges, the company reported selling 30% of the collection, equivalent to about 90 BTC ($3.9 million).

  • Had all NFTs been sold, the total revenue could have reached up to 300 BTC ($12.9 million).

This is a rocky start for Taproot Wizards, which secured $7.5 million in seed funding last November to develop Ordinals-focused projects.

Udi Wertheimer, a co-founder of the company, acknowledged the issues during an X spaces, admitting that the experience did not meet expectations.

Non-fungible News

šŸ’” INSIGHT

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