Crypto Promoter “Bitcoin Rodney” Hit with New Tax Charges: Faces Up to 20 Years in Prison

Rodney Burton, a well-known bitcoin advocate who goes by the name “Bitcoin Rodney,” is currently in a much bigger legal fight. Federal prosecutors have opened a new indictment that charges Burton with tax evasion and conspiracy to run an unauthorized money transmission business. They want to hold him responsible for his part in the collapse of the fake HyperFund (also called HyperVerse) scheme.

If Burton is found guilty of the most serious charges, he could spend up to 20 years in federal prison.

The U.S. Attorney’s Office for the District of Maryland has filed court papers saying that the new allegations are based on Burton’s supposed attempts to hide the huge profits he made by getting people to join the HyperFund scheme.

Prosecutors said that between 2020 and 2022, the operators of the scam paid Burton over $7.8 million in “promoter fees” in stablecoins and fiat that were not tied to the scheme. The indictment says that Burton:

1. Failed to Report Income: Allegedly did not report these earnings on his personal or business tax returns.
2. Shell Companies: Used a network of shell entities and corporate bank accounts to launder the proceeds and obscure the source of the funds from the Internal Revenue Service (IRS).
3. Luxury Spending: Used these untaxed funds to purchase luxury vehicles and real estate.

The $1.89 Billion HyperFund Scheme

Rodney Burton was one of the most well-known people associated with HyperFund, which was said to be a decentralized finance (DeFi) investing platform. The Department of Justice (DOJ) has called HyperFund a huge Ponzi scheme that stole almost $1.89 billion from investors all over the world.

The plan guaranteed investors daily passive returns of 0.5% to 1%, saying that the money came from big crypto mining operations. But federal investigators did confirm that:

• No Mining Existed: The “HyperTech” group did not possess the mining operations they claimed.
• Ponzi Mechanics: Payouts to earlier investors (including Burton’s promoter fees) were funded exclusively by money collected from new victims.

“Whether it’s cryptocurrency fraud or any other financial fraud, if it sounds too good to be true, it probably is. This office and our law enforcement partners will hold perpetrators accountable for these schemes.”

Burton was a “promoter,” not one of the people who started the plan (Sam Lee and Zijing “Ryan” Xu, who are also facing prosecution). The DOJ, on the other hand, says his contribution was quite important. Burton used “social proof” to get thousands of retail investors to engage in the hoax by throwing expensive parties and showing off his wealth, which he often said came from HyperFund.

He was first detained in early 2024 and denied bail because judges thought he may try to escape because he had a lot of connections outside the country and access to untraceable digital assets.

https://www.justice.gov/usao-md/pr/three-individuals-charged-189-billion-cryptocurrency-fraud-scheme