Australia’s Security Regulator Faces Scrutiny Over Failure to Warn Citizens of the HyperVerse Crypto Scheme
Australia’s Assistant Treasurer Stephen Jones has expressed the intention to look into reasons why the country’s securities regulator failed to warn citizens of the potential danger posed by the HyperVerse crypto scheme.
A recent Guardian report says Jones would question the Australian Securities Investment Commission (ASIC) why it didn’t release a warning for consumers like other global regulators.
The scheme which led to massive global losses somehow escaped the attention of Australian regulators despite foreign authorities calling it a scam and flagging its operations as a suspected pyramid scheme, the report noted.
New Zealand, Hungary, Germany, Canada, and the United Kingdom have previously issued warnings on the scheme as far back as 2021 but the local regulators failed to warn users.
Jones stated that the scheme sold worthless investment products to the public and a lot of people got caught up on it increasing user losses.
“ This type of scheme works by convincing innocent people to invest their money into a product that might not exist, with the only source of income being money from new investors.”
He added that he doesn’t know why warnings were not issued but in the ordinary course of things, these sorts of operations are meant to be flagged.
The scheme resulted in several local and foreign consumers losing assets with on-chain analytics firm Chainalysis projecting user losses up to $1.3 billion. The operation was run by a firm HyperTech with its Chairman Sam Lee and “founder” Ryan Xu.
Both were former directors of Blockchain Global, an Australian crypto company that collapsed in 2021 and indebted $58 million to creditors although local regulators say it doesn’t intend to take legal actions at the moment.
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