“Can you imagine,” the presenter asks, “owning your own planet?”

“Imagine redesigning a desert planet and turning it into an oasis where human habitat can thrive and blossom.

“Can you imagine that? Only in the universe, the Hyper universe, that is.”

It is December 2021 and people have tuned in to a “spectacular online event” to learn about the chance to invest in something called HyperVerse, a project its promoters claim will rival Facebook’s multi-billion dollar metaverse.

The MC – a woman named Caelee – stands on an illuminated blue stage with a moonscape in the background.

“This is the dawn of the next new beginning of the metaverse with infinite possibilities,” she says.

Members are offered a “trio of opportunities” including blockchain education, daily rewards and the opportunity to trade new products in a “complete virtual world”.

The chief executive of HyperVerse, Steven Reece Lewis, encourages potential investors to become early backers of the movement into the metaverse, while senior community members extol the benefits of this “beautiful vehicle” that could “totally transform your life forever”.

The chairman of the HyperTech group, Sam Lee, speaks, as does HyperTech’s founder, Ryan Xu.

Lee says HyperVerse will allow people “to live a more comfortable and worry-free life”, while Xu promises a “perfect virtual world” unlocked by the project’s unique membership model.

The launch comes amid a whirlwind of promotion.

Messages of support are posted online from the Apple co-founder Steve Wozniak and the US actor Chuck Norris as the Hyper project gathers momentum.

For potential investors, the project offers astonishing returns.

Memberships start at US$300 and earn daily returns of a minimum of 0.5%, with a tripling of investment earned in 600 days. To take advantage of this “chance of a lifetime”, people are encouraged to build the Hyper community, to make a “better world for average people” and earn more in the process.

But as it turned out the event, and all within it, was a mirage.

Steven Reece Lewis was a paid actor.

The HyperVerse never existed.

Two years later, the collapsed project has been named in US court documents as an alleged “pyramid and Ponzi scheme” that bilked investors worldwide of a “staggering” US$1.89bn (A$2.89bn).

There is no suggestion Wozniak, Norris or Stephen Harrison, the actor who appeared as Reece Lewis, knew the details of the scheme.

‘Materially false and fraudulent pretenses’

In 2022, the community that had been assiduously built up during the pandemic began to fracture, as thousands of members suddenly reported losing access to their funds.

“SORT OUT THE WITHDRAW PROBLEMS!!” one member wrote to the HyperVerse Twitter account.

To try to maintain the faith of the Hyper community, HyperTech launched a new project called HyperNation. This was an even more bizarre offering promoted by a hooded man wearing a gold mask and gloves promising members a universal basic income and a chance to be “liberated and free”. Some senior promoters and many members, alarmed at the change of direction, jumped ship.

But investors worried about recovering their funds were strung along to the next iteration of the scheme, and many followed instructions to put in more funds to guarantee the return of their “1x” – the initial investment.

In January, the US Securities and Exchange Commission (SEC) lodged a claim in the district court of Maryland naming Lee as one of the alleged co-founders of the HyperNation, HyperVerse and HyperFund schemes. (HyperFund was renamed HyperVerse at the December 2021 launch.)

Brenda Chunga, a senior US promoter otherwise known as Bitcoin Beautée, was also charged.

Xu has not been charged and is not named in the US proceedings.

The claim alleges that the HyperTech group ran a “global, crypto asset-related, multi-level marketing pyramid and Ponzi scheme” which had “no real source of revenue other than funds received from investors”. It alleged that without legitimate revenue sources, “investor withdrawals were paid with new investor deposits”.

The court documents relate to the various Hyper schemes running from about June 2020 to November 2022.

Separately, Lee also faces the criminal charge of conspiracy to commit securities fraud and wire fraud.

Lee and his co-conspirators stand accused of allegedly “inducing investors to invest … through materially false and fraudulent pretenses, representations and promises”.

Lee has claimed that at its peak the HyperVerse community numbered 2 million people.

Lee has said he wanted to increase that to a billion people within three years, while Xu said the HyperTech group had plans to “build an army”.

Lee moved to Dubai in late 2021 but, far from being in hiding, the former frontman of the Hyper schemes has been at pains to present himself as the community’s saviour. Xu’s whereabouts are unknown.

In early 2023, Lee claimed in online zoom meetings with investors he had been “caught off guard” by people’s inability to withdraw funds in the various HyperTech group schemes, and he now wanted to help find a solution.

“I thought there was plenty of money to go around but that, unfortunately, for whatever reason, that did not reach membership,” Lee said.

“I’m here because something went wrong and … just saying it’s wrong is an understatement, it’s gone terribly wrong, but you know I’m here to face the music, I’m here to deal with this.”

The loquacious Australian, who claims to be a “private” person, has fronted countless Zoom meetings amid the fallout, blaming a mystery “corporate” team for the scheme’s failures.

When asked to explain why and how things went wrong, Lee says he has signed non-disclosure agreements preventing him from telling the full story. He has denied the scheme was a scam, and has declined to answer questions from Guardian Australia.

Xu could not be contacted for comment.

Cult-like following

Lee appears to command an almost cult-like following among his supporters.

“Sam, you just put it all on your shoulders, and I want you to know … we all appreciate it, but you don’t have to just have it on your own shoulders,” one senior Australian promoter told Lee in a meeting last year.

In another meeting, a supporter led an 11-minute prayer for Lee, asking God for help “to save this platform”.

Lee appears to cultivate his following carefully. He gives almost sermon-like lectures on blockchain technology and his money-making philosophy, and invites people to visit him in Dubai. He promises to share information not available to others with those prepared to meet him in person. Community meetings emphasise the importance of staying “positive”, and it was not uncommon for members – including those who have lost money – to profess their love to Lee and commitment to their “journey”.

Meetings talked about the Hyper “family”, and when members were unable to withdraw funds, they were asked to keep “faith”.

In an apparent bid to relaunch HyperVerse in mid 2023 – as a new scheme called Hyper Ascension that never eventuated – Lee said he wanted people to join him to “come together and heal”.

“We will turn defeat into victory. And through victory we will bring peace and prosperity to our community.”

Lee is also a member of a Telegram group called “High Tea with Sam” in which he records himself drinking tea or coffee in near-daily updates to a core group of his supporters.

One of Lee’s later projects called We Are All Satoshi offered potential investors a “selfie with Sam Lee” if they bought a package worth US$25,000 or above.

Lee has been linked to a series of investment schemes since the Hyper collapse, including StableDao, Vidilook and VEND. He appeared in a video promoting VEND just last month, within days of being charged in the US.

Lee has claimed he was involved only in the technology side of HyperVerse, but for investors he was always front and centre.

“Community leaders have always projected you as the man with the Midas touch,” one Nepalese investor told Lee in 2023. “HyperTech, HyperVerse, HyperFund, whatever, it’s Sam Lee, it’s Sam Lee, it’s Sam Lee, that is all we have been told day in, day out.”

Hyper promotional material encouraged due diligence and emphasised the importance of Xu and Lee’s business backgrounds and the success of their “multi-billion dollar group of companies” – referring to Blockchain Global, H Cash and Collinstar Capital, which made up the Hyper Tech group.

These companies were Australian.

The ‘crown prince of Bitcoin’ and ‘the Martian’

It was 2014 when Lee and Xu first met at a blockchain event in Melbourne.

Xu, a Chinese national, had moved to the city to be with his girlfriend and claimed he had a lot of spare time on his hands.

Along with fellow blockchain enthusiast Allan Guo, Lee and Xu established the Bitcoin Group, which they hoped would be the first publicly listed bitcoin company in the world.

Speaking in a later blockchain documentary about the listing plan (which ultimately failed), Xu explained. “So many people said we were liars, [said] we were doing pyramid schemes. What I wanted to prove was that if we could … get recognised by mainstream regulators then we should be able to prove to everyone that this industry is a very normal one.”

Lee, just 26 at the time, was feted as the “crown prince of Bitcoin”, and became the poster boy for blockchain technology.

In a promotional video for the Bitcoin Group, a young Lee talked about his “girlfriend”.

“She has never betrayed me, and my wife loves her very much,” he says, smiling, to the camera. “We all know who I’m talking about – it’s Bitcoin!”

Xu, who claims to be one of China’s “four bitcoin kings”, gives himself the nickname “the Martian”.

“I feel like I don’t belong on this Earth,” he explained.

Separately to Bitcoin Group, which was renamed Blockchain Global in 2016, Xu and Lee began their first Hyper project together, headlining a launch event in Hong Kong in 2019 for HyperCapital.

This appears to have laid the foundations for the later Hyper schemes, offering a similar membership model and projected high rates of returns.

From as early as 2021, regulators around the world were issuing warnings about HyperFund and later, HyperVerse, but the schemes ran unchecked in Australia, where the companies allegedly behind them were based.

By 2021, just as HyperFund was taking off around the world, Blockchain Global collapsed. It owes creditors $58m, and its directors, including Lee, Xu and Guo, have been referred to the Australian Securities and Investments Commission (Asic) for alleged potential breaches of the Corporation Act.

Guo is not believed to be involved in the HyperVerse scheme and is not named in the US proceedings. He has not responded to questions from Guardian Australia.

After Guardian Australia’s investigation into HyperVerse, Asic announced last month that it would assess the liquidator’s report, filed in late 2023.

Where is the money?

In early 2022, as investors began reporting that they could not withdraw funds from HyperVerse, the senior US promoter Rodney Burton was shopping for a new Rolls-Royce. He ended up buying two on the same day.

The 54-year-old from Miami, known as Bitcoin Rodney, wasn’t afraid of flaunting his wealth. On Instagram, Burton would post about opulent shopping trips in Dubai where he splurged on designer clothes, drank $3,000 bottles of champagne and ate steak enrobed with 24-carat gold. He claims to have bought a diamond-encrusted Audemars Piguet watch worth $1.4m.

In 2021, he hosted a series of cryptocurrency promotional events, including hiring the $40m Seafair megayacht in Florida South for a $3,500-a-head party featuring the rapper Rick Ross.

Court documents filed against Burton allege he was one of those at the top of the HyperVerse pyramid in the US. Investigators have pinpointed about US$8m he allegedly received from investors through the scheme.

Brenda Chunga, who court documents say was “arguably the face” of HyperVerse’s presence in the US, is alleged by the SEC to have personally received $3.7m from investors.

In an interview in mid-2021, however, Chunga was credited with bringing $640m into the Hyper scheme. “Brenda is the key reason why the United States is on the map,” a fellow senior promoter said.

“She is an exceptional leader … loved by the community, loved by her team.”

If the losses to HyperVerse run to US$1.89bn, as alleged in the court documents, then the millions allegedly pocketed by Chunga and Burton are pocket change.

Crypto tracing undertaken by the law firm Wealth Recovery Solicitors has followed funds lost to HyperVerse to the collapsed HOO exchange, but beyond this, it is unclear where, and to whom, the money has flowed.

The SEC complaint against Lee says the Hyper schemes ran globally, but it is uncertain which countries have been most affected. HyperVerse initially appointed six senior leaders as its authorised presenters, including two in the US, two in the UK, one in Australia and one in Ireland. The earlier HyperFund was launched in both Chinese and English.

Guardian Australia has revealed that throughout 2021 and 2022, promoters appeared to target countries in Africa, Asia and the Pacific. There are also anecdotal reports that it was popular with the African American community in the US. Warnings were issued in Germany, Quebec, New Zealand, Hungary, Italy, the UK, India, Nepal, Bermuda and even the Channel island of Guernsey, revealing the extent of its reach.

Legal action is now under way in the UK, with claims being made against the banks for HyperVerse losses. The US is so far the only jurisdiction to lay charges against anyone involved in the scheme.

For people caught on the wrong side of the HyperVerse collapse, more than money has been lost.

There have been reports of members taking their own life, depression and stress-induced heart attacks. Guardian Australia has spoken to members who lost their life savings, and at least two investors who lost their homes.

The schemes have been a wrecking ball, destroying relationships and trust for those who recruited friends and family into the scheme.

Before the HyperVerse collapse, in February 2021, Burton posted pictures on social media of himself with Xu in Dubai, calling him a “multi billionaire” and an “amazing human”. At a dinner with Burton and other senior promoters, Xu promised “to change the world together”.

“We are trying to revolutionise the entire financial system,” he said.

“If we come together and join the same platform, and we can have the same idea and then we can have the same consensus, and we keep recruiting our army, and one day if our army reaches one billion people, then the whole world belongs to us.

“That is our vision.”