Incident Overview
HyperVerse crypto hedge fund collapses, resulting in a loss of approximately 1.3 billion USD for investors in an exit scam.
HyperVerse, formerly known as HyperFund, was a cryptocurrency hedge fund that collapsed, causing significant losses for its investors. The fund was promoted by Australian entrepreneur Sam Lee and his business partner, Ryan Xu. The scheme operated under various names, including HyperFund and HyperVerse, and has been flagged by regulators overseas as a possible "scam" and "suspected pyramid scheme." Investors were asked to pay in cryptocurrency for subscription packages, with rewards accumulating in "hyper units" at a daily rate of 0.5%.
Similar to traditional pyramid schemes, members were also incentivized to recruit new members. While initial investors were able to cash out their hyper units, convert to other cryptocurrencies, or withdraw funds, many later investors lost their money. The total funds lost in this exit scam are estimated to be around 1.3 billion USD.
Incident Report
Protocol Information
Market Context at Time of Hack
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to HyperVerse, these are the critical security checks that could have prevented this incident (January 2022).
- Verify all logic paths related to Rugpull are guarded by proper access controls and input validation
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
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