The Crypto Ponzi Scheme Avenger
“So my money’s gone,” read the top comment in mid-October. “Lesson learned.”
To Mr. de Hek, everything about the Hyper empire seems suspicious. On its website and in promotional videos, HyperFund explained that investors could buy “memberships,” starting at $300, and earn “rewards” that accumulate daily in their account. These rewards took the form of “HU”, the internal trading currency, said to be at parity with the US dollar.
And why would everyone’s HU triple in 600 days? Because the supposed founders of HyperFund – Ryan Xu and Sam Lee, described on promotional websites as a pair of superstar blockchain entrepreneurs – were going to pour all the money into promising and profitable crypto projects, which they claimed would eventually serve 30 million customers. They also said the company would be listed on the Hong Kong Stock Exchange.
It sounded plausible to many. Whoever ran HyperFund capitalized on the craze for crypto, which to most people at the time was an astonishingly complex technology that seemed to create millionaires. But HyperFund never went public, and the only product it sold was membership to HyperFund. Members who recruited new members received a cut of the recruits’ rewards, a multi-year draw in pyramid schemes, and an occasional draw in Ponzis.
For Mr. de Hek, this sale of memberships, in the absence of any product, was a flaming red flag that he had seen all too often. Before the pandemic, he had set up Elite: Six, a company that hosted twice-weekly in-person networking meetings for small business owners in Christchurch. Those who paid $60 a month could introduce themselves and their company. Mr. de Hek scrutinized each pitch, and in more than a few cases the main product was an entry fee, which earned the right to recruit others and get a cut of the entry fee. And so on.
“They were basically multilevel marketing companies,” Mr. de Hek said. “I hate them with a passion. I never let them in.”
To understand that passion, and his mission to wipe out crypto-Ponzi schemes, you need to know something about Mr. de Hek’s childhood. Like everyone in his family, he was raised as a Jehovah’s Witness, a Christian denomination that teaches that only believers will survive the impending destruction of the earth.
“From the age of 5, I knocked on the doors of strangers and told them that fires and earthquakes happened for a reason, that the world was coming to an end,” he said.
