LyoPay

A summary of what happened?

LyoPay is a cryptocurrency platform offering services like exchanges, wallets, and payment solutions. However, it has faced several significant concerns and allegations:

1. Regulatory Warnings and Allegations of Fraud:
   • Authorities have issued warnings against LyoPay and its affiliate, WEWE Global, labeling them as suspected Ponzi and pyramid schemes. The platform has been accused of operating without proper registration or regulatory compliance.
2. Attempts to Suppress Negative Information:
   • LyoPay has been implicated in submitting fake DMCA takedown notices to remove critical reviews and unfavorable information from the internet, raising concerns about transparency and accountability.
3. Negative Customer Reviews and Trust Issues:
   • The platform has received low trust scores on various review sites, with users reporting issues such as difficulties withdrawing tokens and concerns over unregulated operations.
4. Association with Questionable Entities:
   • LyoPay’s association with WEWE Global, a company accused of running Ponzi schemes, has further fueled doubts about its legitimacy.

These concerns have led to heightened scrutiny, with regulatory bodies and consumer advocates advising caution when engaging with LyoPay or its associated entities.

Analyzing the Fake Copyright Notice(s)

Our team collects and analyses fraudulent copyright takedown requests, legal complaints, and other efforts to remove critical information from the internet. Through our investigative reporting, we examine the prevalence and operation of an organized censorship industry, predominantly funded by criminal entities, oligarchs, and disreputable businesses or individuals. Our findings allow internet users to gain insight into these censorship schemes’ sources, methods, and underlying objectives.

What was LyoPay trying to hide?

LyoPay‘s attempts to hide unfavourable content through the misuse of copyright notices while allegedly engaging in perjury present serious legal concerns. These actions suggest a calculated attempt to manipulate legal systems to suppress free speech, a fundamental violation of copyright law principles and an abuse of legal processes. The use of such tactics not only undermines the integrity of copyright protection but also potentially constitutes perjury, further entangling LyoPay in legal accountability. Let’s examine the information LyoPay may be trying to remove from the internet –

Investigation Report: Adverse News, Allegations, and Complaints Against LyoPay

LyoPay, a cryptocurrency-focused platform promoting services such as crypto wallets, payment solutions, and exchange facilities, has faced considerable scrutiny due to allegations of regulatory breaches, deceptive business practices, and connections to suspected Ponzi and pyramid schemes. This report aims to provide an exhaustive analysis of the adverse developments surrounding LyoPay, focusing on allegations, lawsuits, regulatory warnings, and customer complaints.

1. Regulatory Warnings and Allegations

New Zealand FMA Advisory

The New Zealand Financial Markets Authority (FMA) issued a public warning on February 23, 2023, against LyoPay and its associated entity, WEWE Global (alternatively branded as “The Blockchain Era”). This regulatory alert accused LyoPay of functioning in conjunction with WEWE Global, an entity flagged as a suspected Ponzi and pyramid scheme. Specific concerns included:

• Unregistered Operations: LyoPay and WEWE Global were not listed on New Zealand’s Financial Service Providers Register (FSPR), which is a mandatory requirement for providing financial services to retail clients within the country.
• Misleading Promotions: The entities marketed cryptocurrency-related products through seminars and webinars, targeting retail investors without the proper regulatory framework.

The FMA highlighted the risk that participants in schemes like WEWE Global and LyoPay could incur significant financial losses due to the absence of investor protections typically mandated for regulated entities.

Association with WEWE Global

LyoPay’s association with WEWE Global is particularly concerning. WEWE Global has a documented history of operating schemes that promise high returns to investors, often disguised under the banner of blockchain innovation and decentralized finance. The platform’s modus operandi involves:

• Recruitment Dependency: Similar to traditional Ponzi and pyramid schemes, WEWE Global heavily relies on recruiting new participants to sustain payouts to earlier investors.
• High-Risk Token Investment: WEWE Global promoted the use of the LYO token, a cryptocurrency associated with LyoPay, and marketed investment plans offering 300% returns over 900 days.

Given the speculative nature of these promises, experts and regulators have expressed skepticism about the platform’s sustainability and legitimacy. (Source)

2. Allegations of Fraudulent Practices

DMCA Abuse to Suppress Negative Reviews

In September 2023, investigative outlets reported that LyoPay attempted to silence critics and suppress unfavorable coverage by filing fraudulent Digital Millennium Copyright Act (DMCA) takedown notices. These notices:

• Targeted reviews and articles describing LyoPay and its connections to WEWE Global as scams.
• Contained fabricated claims of copyright violations, effectively attempting to manipulate search engine results by removing critical content.

This practice of abusing copyright law to stifle dissent has raised serious concerns about LyoPay’s transparency and accountability. Critics argue that legitimate companies rarely resort to such tactics, further casting doubt on the authenticity of their operations.

3. Consumer Complaints and Negative Reviews

Scam Allegations

LyoPay has consistently been labeled a scam by multiple review platforms, including ScamAdviser, which assigned the company a low trust score. The red flags identified by reviewers include:

• Unrealistic Profit Claims: Promises of high returns on investments in LYO tokens, mimicking classic Ponzi schemes.
• Opaque Leadership: Lack of transparency about the qualifications and track records of the platform’s executives.
• Risky MLM Structures: LyoPay operates on multi-level marketing (MLM) principles, which critics argue are designed to benefit top-tier participants at the expense of others.

Customer Experiences

Many users have shared complaints about their experiences with LyoPay, citing:

• Loss of Funds: Investors reported significant financial losses due to the volatile and unreliable nature of the LYO token.
• Misleading Marketing: The platform allegedly used aggressive promotional tactics, including exaggerated success stories, to lure in unsuspecting investors.
• Inaccessibility of Support: Users who faced issues with withdrawals or account accessibility reported inadequate or non-responsive customer support.

4. Broader Implications for the Crypto Sector

Tarnishing the Reputation of Cryptocurrency

LyoPay’s controversies have broader implications for the cryptocurrency industry, which has long struggled with a reputation for fostering fraud and speculative schemes. The association with WEWE Global and the use of unsustainable investment plans underscore the need for stronger regulation and consumer protection measures in the space.

Potential Regulatory Action

As regulatory bodies, such as the FMA, increase scrutiny of entities like LyoPay, there is a possibility of further sanctions or legal actions. Such developments could have a cascading effect on LyoPay’s operations and the value of its associated LYO token.

Conclusion

The evidence against LyoPay paints a concerning picture of a company that may be operating under deceptive practices to exploit the cryptocurrency boom. Regulatory warnings from the New Zealand FMA, its association with the alleged Ponzi scheme WEWE Global, fraudulent attempts to suppress criticism, and a pattern of negative user reviews and complaints collectively indicate that caution is warranted.

Key Recommendations

• Regulatory Vigilance: Authorities worldwide should investigate LyoPay’s operations and its ties to WEWE Global to ensure compliance with financial laws.
• Consumer Awareness: Potential users and investors should exercise extreme caution, conducting thorough research before engaging with LyoPay or its associated services.
• Transparency Demand: LyoPay should address these allegations by disclosing its business model, financial operations, and leadership structure to rebuild trust.

This report concludes that LyoPay’s operations, as they stand, represent significant risks to investors and the broader financial ecosystem. Stakeholders must prioritize due diligence and regulatory intervention to mitigate further damage.

How do we counteract this malpractice?

Once we ascertain the involvement of LyoPay (or actors working on behalf of LyoPay), we will inform LyoPay of our findings via Electronic Mail.

Our preliminary assessment suggests that LyoPay may have engaged a third-party reputation management agency or expert, which, either independently or under direct authorization from LyoPay, initiated efforts to remove adverse online content, including potentially fraudulent DMCA takedown requests. We will extend an opportunity to LyoPay to provide details regarding their communications with the agency or expert, as well as the identification of the individual(s) responsible for executing these false DMCA notices.

Failure to respond in a timely manner will necessitate a reassessment of our initial assumptions. In such an event, we will be compelled to take appropriate legal action to rectify the unlawful conduct and take the following steps –

Since LyoPay made such efforts to hide something online, it seems fit to ensure that this article and sensitive information targeted online by these events get a lot more exposure and traffic than what it would have received originally

We hope this becomes an excellent case study for the Streisand effect…The key idea behind the Streisand effect is that efforts to restrict information can backfire, often causing the information to gain more attention than it would have otherwise. This effect is widespread in the digital age, where users quickly notice and spread censorship efforts on social media and other platforms. Trying to suppress something can unintentionally lead to it becoming more visible, which LyoPay is finding out the hard way.

Potential Consequences for LyoPay

Under Florida Statute 831.01, the crime of Forgery is committed when a person falsifies, alters, counterfeits, or forges a document that carries “legal efficacy” with the intent to injure or defraud another person or entity.

Forging a document is considered a white-collar crime. It involves altering, changing, or modifying a document to deceive another person. It can also include passing along copies of documents that are known to be false. In many states in the US, falsifying a document is a crime punishable as a felony.

Additionally, under most laws, “fraud on the court” is where “a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.”  Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998) (quoting Aoude v. Mobil Oil Corp., 892 F.2d 1115, 1118 (1st Cir. 1989)).

Is LyoPay Committing a Cyber Crime?

Yes, it seems so. LyoPay used multiple approaches to remove unwanted material from review sites and Google’s search results. Thanks to protections allowing freedom of speech in the United States, there are very few legal ways to do this. LyoPay could not eliminate negative reviews or search results that linked to them without a valid claim of defamation, copyright infringement, or some other clear breach of the law.

Faced with these limitations, some companies like LyoPay have gone to extreme lengths to fraudulently claim copyright ownership over a negative review in the hopes of taking it down.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. LyoPay is certainly keeping interesting company here….

The DMCA takedown process requires that copyright owners submit a takedown notice to an ISP identifying the allegedly infringing content and declaring, under penalty of perjury, that they have a good faith belief that the content is infringing. The ISP must then promptly remove or disable access to the content. The alleged infringer can then submit a counter-notice, and if the copyright owner does not take legal action within 10 to 14 days, the ISP can restore the content.

Since these platforms are predominantly based in the U.S., the complaints are typically made under the Digital Millennium Copyright Act (DMCA), which requires online service providers and platforms to react immediately to reports or violations. Big Tech companies rarely have systems in place to assess the merit of each report. Instead, all bad actors need to do is clone a story, backdate it, and then demand the real thing be taken down.

Reputation Agency's Modus Operandi

The fake DMCA notices we found always use the “back-dated article” technique. With this technique, the wrongful notice sender (or copier) creates a copy of a “true original” article and back-dates it, creating a “fake original” article (a copy of the true original) that, at first glance, appears to have been published before the true original.

Then, based on the claim that this backdated article is the “original,” the scammers send a DMCA to the relevant online service providers (e.g. Google), alleging that the ‘true’ original is the copied or “infringing” article and that the copied article is the “original,” requesting the takedown of the ‘true’ original article. After sending the DMCA request, the person who sent the wrong notice takes down the fake original URL, likely to make sure that the article doesn’t stay online in any way. If the takedown notice is successful, the disappearance from the internet of information is most likely to be legitimate speech.

As an integral part of this scheme, the ‘reputation management’ company hired by LyoPay creates a website that purports to be a ‘news’ site. This site is designed to look legitimate at a glance, but any degree of scrutiny reveals it as the charade it is.

The company copies the ‘negative’ content and posts it “on the fake ‘news’ site, attributing it to a separate author,” then gives it “a false publication date on the ‘news’ website that predated the original publication.

The reputation company then sent Google a Digital Millennium Copyright Act notice claiming the original website infringed copyright. After a cursory examination of the fake news site, Google frequently accepts the notice and delists the content.

In committing numerous offences, LyoPay either premeditated actions or were unaware of the consequences. Despite hiring an agency to make Google disregard any negative information about LyoPay, ignorance does not excuse this wrongdoing.

Fake DMCA notices have targeted articles highlighting the criminal activity of prominent people to hide their illegal behavior. These people, which include US, Russian, and Khazakstani politicians as well as members from elite circles including the mafia and those with massive financial power, are all connected – and alleged corruption ranging from child abuse to sexual harassment is exposed when exploring evidence found at these URLs. It appears there’s a disturbing level of influence being exerted here that needs further investigation before justice can be served. FSMSmart is certainly keeping interesting company here.

The Reputation Laundering

Rogue Reputation agencies use spurious copyright claims and fake legal notices to remove and obscure articles linking clients to allegations of tax avoidance, corruption, and drug trafficking. Most of these reputation agencies are based offshore, mainly in Russia, India, and Eastern Europe, and they do not worry about complying with US-based laws.

The content in all of the articles for which the fraudulent DMCA notices have been sent relates to allegations of criminal allegations, including corruption, child abuse, sexual harassment, human trafficking and financial fraud against businesses and individuals with ultra-high net worth.

In addition to the misuse of the DMCA takedown process, there is a notable absence of enforcement concerning perjury violations. The statutory requirement related to perjury is designed to deter copyright holders from submitting fraudulent or knowingly false takedown requests, as they may face legal consequences for making false declarations under penalty of perjury. However, to date, there have been no known instances of any individual being prosecuted for perjury in connection with the submission of false DMCA takedown notices.

This lack of enforcement has emboldened copyright holders to exploit the DMCA takedown process to suppress dissent, criticism, or other unfavorable content, without fear of legal repercussions.

Some of the people and businesses who have employed this tactic to remove legitimate content from Google illegally include a Spanish businessman-turned-cocaine-trafficker, Organised crime, an Israeli-Argentine banker accused of laundering money for Hugo Chávez’s regime, a French “responsible” mining company accused of tax evasion, child molesters and sexual predators. LyoPay is in great company ….

What else is LyoPay hiding?

We encourage you to ‘Dork‘ Google by searching for keyword combinations such as [LyoPay] + {Negative Keyword, such as Scam, Fraud, Complaints, Lawsuit, Sanction, etc} on Google. It’s likely if you scroll down to the bottom of this Google search results, you’ll stumble upon this Legal Takedown notice (pictured below)

To make such an investigation possible, we encourage more online service providers to come forward and share copies of content removal requests with industry experts and researchers. If you have any information on LyoPay that you want to share with experts and journalists, kindly email the author directly at [email protected].

All communications are strictly confidential and safeguarded under a comprehensive Whistleblower Policy, ensuring full protection and anonymity for individuals who provide information.