ASIC In Hot Water Over HyperVerse Crypto Scheme

By Ben Knight January 05, 2024 In Australia, Cryptos
  • Aussie watchdog ASIC faces scrutiny for failing to warn consumers about the HyperVerse Ponzi scheme.
  • The scam lured investors with unrealistic gains and celebrity endorsements.
  • The company’s CEO – who didn’t actually exist – further underscore fraud, demonstrating classic Ponzi hallmarks.

The crypto industry has matured significantly over the past few years. People say that disaster creates opportunity, and the calamitous collapse of platforms like FTX and Terra has ushered in a new era of responsibility among the community. A little closer to home, a similar story is unfolding, as a new report from The Guardian has unveiled some very strange findings about the now-defunct crypto company HyperVerse. At the top of their hit list is Australia’s consumer watchdog, ASIC, which is being pinned for not providing enough protection to the everyday retail investor.

HyperVerse CEO Didn’t Actually Exist

In even more stunning news, The Guardian’s report uncovered a key detail from the HyperVerse saga that leaves its illegitimacy without a doubt – the company’s purported CEO didn’t actually exist.

The HyperVerse scheme attracted new investors via a membership package, where users could sign up to the platform and subscribe with their cryptocurrency to receive extremely lucrative rewards. Like with most Ponzi scams, new users were incentivised to rake in new users such as family and friends – however, this isn’t exactly taboo in the financial industry, with many legitimate exchanges offering solid referral programs.

Users could swap out their crypto assets for “hyper units”, which would receive impressive daily reward rates and could theoretically be swapped out for real crypto and eventually fiat currency. Ponzi schemes are a bit like a house of cards. The initial users actually can make a substantial profit from these scams, as rewards are generated by new investors subscribing to the platform and parting with their money. However, as customers slowly start drying up and revenue streams slow, eventually there isn’t enough cash to “pay out” the lucrative rewards. Soon enough, investors find that they can’t withdraw their money at all and that the business hasn’t actually been investing their money at all. The rug is pulled, the platform disappears, and the victims can lose out on billions.


ASIC Didn’t Issue Warning in Time

Australia’s assistant treasurer, Stephen Jones, has queried why ASIC – responsible for the financial safety and cybersecurity of Aussies – failed to issue a consumer warning. The question becomes especially pertinent given that consumer watchdogs from other nations like the UK, New Zealand and Hungary released cautions as early as 2021, a year before the collapse. 

The HyperVerse scheme had various telltale signs of a Ponzi scam that hopefully the Australian community can learn from:

  • Unrealistic rewards rate. 0.5% interest daily equates to 300% per year – a ridiculous amount to guarantee, by even cryptocurrency’s standards.
  • Constant celebrity endorsements. Remember Larry David’s FTX commercial where he told people not to trust his advice? HyperVerse secured partnerships with Chuck Norris and Steve Wozniak, which is a common ploy to trick investors.
  • Double-check leadership. HyperVerse’s leadership didn’t exist – and a cursory Google would’ve revealed that the supposed CEO had a one-month old Twitter account and didn’t even have a LinkedIn.

Ben Knight

Ben Knight

Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.

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