The HyperVerse cryptocurrency scheme targeted investors in developing countries across Asia, Africa and the Pacific before its eventual collapse left many people unable to access funds.
In Nepal, some people who took out bank loans to buy packages in HyperVerse said they felt suicidal when they were unable to withdraw their money, with some cases of self harm, according to one investor.
A UK-based promoter of HyperVerse who went on a tour of five African countries in 2022 told one radio station in Ghana that there were millions of people around the world benefiting from blockchain “without really understanding it”.
HyperVerse, which was linked to an earlier scheme known as HyperFund, was launched by the Australian blockchain entrepreneur Sam Lee and his business partner Ryan Xu, two of the founders of the collapsed Australian company BlockChain Global.
A Guardian Australia investigation has revealed widespread losses to the schemes that escaped regulatory warnings in Australia, despite one overseas regulator warning they were a possible “scam” and another calling HyperVerse a “suspected pyramid scheme”.
The drive to expand the scheme, which encouraged existing members to earn financial rewards for bringing in new ones, appears to have resulted in its spread to previously untapped markets, including developing countries.
In January 2022 the Central Bank of Nepal issued a public warning that named HyperFund and some other unrelated schemes, saying people were being enticed to engage in such crypto currency products with the promise of “high returns in a short period”.
“Given that Virtual Currency/Cryptocurrency is not legally recognized as foreign exchange or currency in Nepal, engaging in the aforementioned illegal financial tools could deceive the public and result in illegal capital flight from the country.”
In a Zoom meeting between Nepali Hyper members and Lee in February 2023, the members said people were angry because they were unable to withdraw funds from the platform.
One member told Lee he was “sad and grumpy”, and was managing demands from people he had brought into the scheme who were unable to access funds.
“You need to do something really fast, mate, because you are somewhere far away and maybe you’re not under pressure directly, but people like us, we are the people who live in the neighbourhoods and our relations have deteriorated, and whenever we wake up in the morning we’ll have people on our doorstep.”
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Investors were offered “memberships” to the HyperVerse, which was a “blockchain community” that allowed members to “explore the HyperVerse ecosystem”.
The minimum membership amount was $300USD, which was converted to HyperUnits once invested.
The scheme offered minimum returns of 0.5% a day, with a 300% return over 600 days.
Members were incentivised to “reinvest” their earnings, with more HyperUnits offered if funds were not withdrawn once they became available.
Members were also paid HyperUnits to recruit new members, with referral commissions paid on a sliding scale according to how many people were recruited. Further commissions were paid based on how many people these recruits then recruited, down to 20 levels.
HyperUnits were linked to various crypto tokens and once matured could be withdrawn and converted to other cryptocurrencies.
While early investors profited and were able to make withdrawals, the scheme has left many investors unable to access their funds.
A Nepali man living in the UK told Lee that some people in his home country were suicidal, having taken out bank loans to buy packages in HyperVerse, saying one person he knew had engaged in self harm.
“It was presented in such a lucrative manner that there have been instances where people loaned money to buy packages in this company. I know that’s wrong, we never told them to do that, the leaders never told them to do that, but … the benefits outweighed the risk therefore people took some loans from banks and they bought packages in this project,” the Nepali man said.
“I don’t want to say the name but there has been a case of self-harm back home [in Nepal]. We are receiving several SOS-es, you know, because people are in such a condition it’s better for them to just take a suicidal sort of step rather than wait for this company to come out with a plan to pay them back.”
In response, in the Zoom call, Lee said he hoped vulnerable people could be prioritised to get their initial investment back, but denied he was responsible.
“I don’t want to say anything about these individual cases because, you know, I’m not in a position of knowing these cases to be empathetic, right? But, you know, we have to just realise that … a lot of people have been misled in many other industries, this is just the newest industry to be misled in,” Lee said.
“And the way we prevent this from happening again is we need to increase everybody’s literacy around the technology and how these opportunities operate.”
Lee blamed the “corporate” team behind HyperVerse for the situation.
He denied he was involved in HyperVerse, despite speaking at its official launch, saying he was only involved in the funds management side through his role in the HyperTech group, of which he is chairman.
Another person in the February 2023 meeting challenged Lee on this claim.
“Community leaders have always projected you as the man with the Midas touch – 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,” they said.
In response, Lee said: “I cannot really disappear from HyperVerse if I’m never involved.”
“Corporate has put out misleading information, which of course leadership used to drive sales, so ultimately the buck stops with corporate. But I am not 100% free from this because when things have been misinterpreted, I could have always at any time put out a press release or a statement to clarify,” he said.
“But that delay in doing so was because I’ve always trusted corporate to do the right thing because they are very old partners that I’ve worked together with for many, many years. So they’ve always done very well and have done things in a manner that generated the results, but in this case have failed spectacularly the community as well as failed me.”
In December 2021, HyperFund members were “migrated” into HyperVerse, with a global launch event promising to build a metaverse to rival Facebook. The launch event included presentations from Lee, Xu and a chief executive introduced as Steven Reece Lewis, who, in fact, was an Englishman named Stephen Harrison contracted to act the role of a corporate “presenter”, as a Guardian Australia investigation revealed.
Harrison has denied having any contact with either Xu or Lee, playing any role in the underlying business or benefitting from any investor losses.
‘Financial revolution world tour’
Shortly after the HyperVerse launch, in March and April 2022, a UK man named Des Amey headed a “financial revolution world tour”, running in-person seminars in Ghana, Nigeria, Tanzania, Kenya and Zambia.
Amey is a director of Amey Finance Academy Ltd, which in July 2022 was the subject of a UK Financial Conduct Authority warning that said: “We believe this firm may be providing financial services or products in the UK without our authorisation” and goes on to confirm “This firm is not authorised by us and is targeting people in the UK. You will not have access to the Financial Ombudsman Service or be protected by the Financial Services Compensation Scheme (FSCS), so you are unlikely to get your money back if things go wrong.”
Amey’s website – ameyfinance.com – included a guide on how to join HyperVerse, with a “concierge” service offered to sign people up to the scheme. The website has since been taken down.
In July 2022 Amey was interviewed in a HyperCommunity leadership training video broadcast on Zoom, in which he was presented as a “VIP5 STAR” leader within the group.
Members achieved a star ranking based on how many people they attracted into the scheme, with VIP5 STAR the highest level.
According to the presentation, Amey joined Hyper in April 2021 when the scheme was being run as HyperFund and he subsequently recruited more than 22,000 members across HyperFund and HyperVerse.
In the video, Amey said he was just back from a tour of 11 countries. As well as the five African countries promoted for the speaking circuit, Amey also said he had visited the Seychelles, US, Canada, Jamaica, Germany and the United Arab Emirates. This was unrelated to any promotional material presented in Nepal and there is no evidence to suggest he recruited members there.
“There was real impact, you know the world is now alight with all things Hyper,” he said.
“I’m now a VIP five-star node leader on this platform. This industry and this platform completely changed my life. Now I travel around the world teaching people, you know, mindset – how to become financially independent, not just the theory but giving people practical solutions like the Hyper platform,” he said.
Videos of the events he headlined in Ghana, which were open only to those who had bought tickets, reveal HyperVerse material being promoted.
In media interviews, Amey spoke in general terms about making money through blockchain technology without mentioning HyperVerse.
In an interview with the Ghanaian radio station Starr FM about the “largest blockchain alliance”, Amey said people did not need to understand blockchain technology to take advantage of its rewards.
“There are millions of people around the world who are benefiting from blockchain without really understanding it,” he said.
“And that’s because there are many companies who say, ‘OK, we will do all the legwork … we will do all of the investing, we’ll do all the technical aspects of blockchain, and we will just allow you to benefit financially from all of that’.”
Amey also visited Nigeria in late 2021 and told the Nigerian news service Business Day about a “membership rewards program” that allowed people to buy “houses for cash”.
“We’ve now partnered with a multi-billion dollar company and we have a rewards program where people are paid every single day, and through the compound effect they are able to grow a very small amount of money into a large amount of money in a very short timeframe,” Amey said.
“And people now in Africa, in Asia, and in so many developing countries, are able to use this rewards program to buy houses for cash. It’s a very clear system, it works like clockwork and it does exactly what it says on the tin – our members get paid every single day.”
Amey did not name HyperFund, and at one stage the interviewer asked: “You don’t want to mention that [company] do you?” He replied: “No, no, no.”
He said Nigerians had been interested in becoming involved in the membership scheme and “we’ve had several events … and meetings.”
Amey did not respond to questions from Guardian Australia.
In 2021, the New Zealand-based Kaniva Tonga newspaper reported that Tongans across the diaspora were also being urged to join the scheme. This was unrelated to Amey’s promotional activity.
In February 2023, a US-based Tongan promoter reportedly warned members not to put any more money into the scheme.
“Those of you who have invested tens of thousands, thousands, and hundreds and have yet to withdraw it, Sam Lee will be here in an attempt to refund their money,” the Tongan promoter was quoted as telling her members. According to the report, she claimed that Lee wanted to obtain the names of investors who couldn’t get money out so he could help them retrieve their money.
Lee, who has previously denied the scheme was a scam, did not respond to questions from Guardian Australia.
