https://www.rollingstone.com/culture/culture-news/bitcoin-rodney-arrested-crypto-1234942231/


MONEY MOVES


‘Bitcoin Rodney’ Pushed Crypto With Jamie Foxx and Rick Ross. Now He’s Under Arrest


With celebrity endorsements to spare, the influencer promised he could easily make you a millionaire — and promoted an alleged pyramid scheme

BY MILES KLEE

JANUARY 9, 2024




THIS ARTICLE WAS produced in collaboration with Court Watch, an independent outlet that unearths overlooked court records.

The dream of making a quick and easy fortune in cryptocurrency took yet another hit on Friday with the arrest of Rodney Burton, a.k.a. “Bitcoin Rodney,” a relentless promoter who sold himself as a high-tech financial guru and was often seen out with celebrity pals including Jamie Foxx, Rick Ross, Marlon Wayans, and Tiffany Haddish.

Burton, whose 2021 “Reinvent Yourself With Crypto” event in Miami also included appearances by singer Akon, FUBU founder and Shark Tank regular Daymond John, and convicted fraudster Jordan Belfort (whose memoir The Wolf of Wall Street inspired the Martin Scorsese film), was taken into custody in Florida and is awaiting transfer to Maryland, where he’s being charged. The criminal complaint that was filed rests on an affidavit by a special agent of the IRS who found probable cause to believe that one of the crypto operations that Burton was involved in was an “unlicensed money transmitting business.” Burton is accused, in short, of illegal transfer of currency — but the broader accusations in the legal filing paint a picture of a pyramid scheme operated by several people, including Burton. (Burton did not respond to requests for comment through social media or his public defender.)



The statement describes Burton’s role in advising people to invest in HyperVerse (previously called “Hyperfund”), a purported decentralized finance crypto investment platform established in 2020, alongside two other HyperVerse promoters unnamed in the document (“Individual 1” and “Individual 2”). The IRS special agent alleges that this entity made “fraudulent promotional presentations to investors and potential investors.” Touted as the “world’s most sustainable passive rewards program,” HyperVerse sold investor “memberships” that promised double or triple returns — up to one-percent daily “rewards,” paid for in part using “large-scale crypto mining operations.” But it had no mining capability, and, according to the charging document, the investors “were paid with funds collected from more recent investors.” The fund collapsed in mid-2023, costing consumers approximately $1.3 billion. (Last week, a Guardian investigation found that its CEO, Steven Reece Lewis, “does not appear to exist,” though HyperVerse’s founders gave no comment for the story.)


Neither Burton nor the Southern District of Florida Federal Public Defender’s Office, which is currently representing him, responded to requests for comment from Rolling Stone, and no others have been arrested in connection with HyperVerse to date. The fund was created by Zijing “Ryan” Xu of China and Xue “Sam” Lee of Australia, two other crypto entrepreneurs whose Blockchain Global crypto exchange platform ACX.io imploded in 2019, with creditors still owed around $50 million. Blockchain Global itself collapsed in 2021 and entered voluntary administration.

HyperVerse was run as what various financial regulators around the world warned was a potential pyramid scheme, and that’s what seems to be presented in the charging documents: members invested money that was converted into “HyperUnits,” or HU, that could then be withdrawn and converted into Tether, a so-called “stablecoin” that was established in 2014, whose value is pegged to the U.S. dollar and can easily be converted to fiat currency. Investors were also encouraged to reinvest what they made and refer new customers for commission fees. According to the charging statement, Burton, on at least several occasions, paid “rewards” to investors out of his own HyperVerse account.


According to the IRS investigator who wrote Burton’s charging document, “beginning in at least July 2021 HyperFund began blocking investors’ ability to convert HU to cryptocurrency.” Yet Burton continued to accept checks and wire transfers from customers through early 2022, the affidavit states, and took in $5,833,562 in these transactions, even though HU was by then effectively worthless. Burton, the filing says, also instructed Individual 1 to ask customers for wire transfers or checks with the inaccurate memo line “Consultation/Training” to avoid scrutiny from banks. Furthermore, the entities he used to conduct these transactions failed to register a money transmitting business with the Financial Crimes Enforcement Network as required by the U.S. Treasury, per the IRS agent.



After Burton’s initial court appearance, the government moved to reseal his criminal complaint, possibly indicating that other defendants are to be charged in connection with HyperVerse.

Burton has cut a flashy figure in the crypto world, wearing crypto-themed clothes and jewelry, buying designer cars with Bitcoin, throwing yacht parties, apparently commissioning his own rap anthem, and earning shoutouts for his business acumen by the likes of Rick Ross, who in 2022 said Burton was “getting real money” compared to “fake-rich” crypto hustlers. This high life has extended to hobnobbing with other celebrities, including Jamie Foxx and music mogul Breyon Precott. In recent years, the likes of Lindsay Lohan, Jake Paul, Tom Brady, Jimmy Fallon, Soulja Boy, Lil Yachty, Kim Kardashian, and Floyd Mayweather have all faced lawsuits and SEC charges for their roles in promoting crypto, in some cases allegedly failing to disclose that they were paid to do so. Most of those suits have already been settled, while Kardashian paid an SEC fine of about $1.3 million in 2022. Burton’s most famous supporters, however, do not appear to have directly endorsed his HyperVerse venture.

In addition to his consulting services, investment tutorials, and event appearances, Burton’s website also advertises an AI-powered crypto trading platform. Yet another link plugged on Burton’s Instagram profile redirects to a cannabis lifestyle site called Cannaglobe. Burton appears to be the name behind the Cannaglobe product “Ryz,” a “sexual enhancer breath refresher” that costs $99.99.


In a November 2021 interview on the popular morning radio show The Breakfast Club, Burton said he’d discovered crypto investing in 2017 and had been passionate about it ever since. Asked by host Angela Yee why people might suspect a crypto opportunity of being a “scam,” Burton replied that not every investment he’s made has been “on the up and up.”

“Some of these deals I’ve made money, some of these deals I failed miserably,” he said. “It’s the reason I’m doing so well now, it’s because I know exactly what to look for.” He also acknowledged that USI Tech, one of the first crypto platforms he promoted, was a Ponzi scheme — it collapsed in April 2018, with tens of millions of dollars vanished — claiming that he didn’t recognize it as such because he was still new to the field.

“I always tell everyone, make sure you have a coach, instructions, direction before you go there and do it, because you can lose everything you made, or earned in life, in crypto,” Burton said.