Massive losses in Australian crypto-currency schemes a warning to would-be investors

Australians who have invested in crypto-currency schemes have lost hundreds of millions of dollars according to a new report in the Guardian.

Tongan promoter of Hyperfund scam in the USA Setaita Folau Tanaki recently warned that Tongan investors who had invested $100,000 and more in the scam had been unable to withdraw their money

Reported losses to these schemes total more than Aus$350 million since 2020. The actual amount lost is likely far higher, with research suggesting just 13% of losses are reported.

The most prominent schemes named in Australia have been HyperFund, HyperVerse and Blockchain Global.

Unfortunately, the Tongan community is highly likely to have its own victims.

Kaniva News has reported several stories in recent years about Tongans in different parts of the world who have been lured into investing their money in these schemes which promise huge rewards, only to see their money disappear.


The latest losses in Australia should act as a warning to would-be investors.

Sometimes the money is the victim’s life savings, such as the $5300 lost by a mother who was conned into investing in a crypto-currency scheme

Tragically, even when the evidence is put in front of them, some Tongans have denied that there is a problem and continued to persuade friends, relatives and into throwing their money away.

Unlike New Zealand, Australia’s financial authorities appear to have been completely lax in trying to regulate these schemes and have not taken any meaningful legal action against them.

In September 2021 New Zealand’s Financial Market Authority warned: “The FMA are concerned HyperFund may be operating a scam.  HyperFund operates on a Multi-Level Marketing (MLM) model and claims to offer passive investment opportunities. We have received reports of them recruiting affiliate investors in New Zealand. It is not registered or licensed to provide financial services/products in New Zealand.”

Sam Lee, the founder of the failed Blockchain Global cryptocurrency exchange. Photograph: Blockchain Global/Facebook


In New Zealand pyramid schemes are illegal under the Fair Trading Act. They usually offer a financial return based on payments made by new recruits. Returns depend on the recruitment of new members, not sales of a product or service. Only the tiny number of people  at the top of the pyramid would likely make money, since the number of possible new recruits in any community would be limited.

Earlier this year In February, the New Zealand Financial Markets Authority issued an interim stop order against Validus Oceania and associated members, which effectively banned it from operating.

In California the state’s Commissioner of Financial Protection and Innovation has issued a ease and desist order against Sam Lee, operator of a failed financial scheme.

International law enforcement agencies have identified crypto-currencies at the centre of  global money laundering operations  by drug and human trafficking cartels.

The United Nations Office on Drugs and Crime warned that crypto-currencies like Bitcoin were being used to launder criminal proceeds and began training law enforcement officials across the Pacific.

The people who benefit most from crypto-currencies are not those who lose all their moneys, but international criminal gangs.

Kaniva News says:

Do not invest in crypto-currencies such as Bitcoin or any kind of pyramid scheme. They are a fraud, offering unrealistic returns that cannot be sustained. You may get some return, but ultimately your money will disappear. Any profits you make will come from other people being defrauded. Any investment you make may well benefit criminal gangs. Investing in crypto-currencies and pyramids is not only foolish, it is also unethical and immoral.

For more information

Investors lose millions as crypto schemes operate unchecked in Australia

As El Salvador counts costs of adopting Bitcoin and UN warns of crypto-currency crimewave, will Tonga heed warning signs?

Lions Share cryptocurrency operation a suspected pyramid scheme – Commerce Commission

Validus claims it will ‘stick around for a long time,’ but withholds full details on withdrawals

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