Executive Summary: Key Legal and Evidentiary Issues

• Allocation of civil liability between an individual promoter and a crypto investment company for losses on high-risk cryptocurrency packs
• Assessment of fault based on optimistic promotional statements, omission of risk warnings, and failure to disclose commissions and a pyramid-style structure
• Determination of whether the client proved contractual liability of the company under written clauses promising refunds and “minor risk insurance”
• Evaluation of whether the promoter’s conduct amounted to extra-contractual (tort-like) fault despite her lack of formal financial training
• Consideration of the investor’s own failure to conduct due diligence and reliance on informal recommendations from relatives and acquaintances
• Quantification and apportionment of damages, including partial fault of the promoter (15%) and full contractual responsibility of the company for the invested capital

Factual background and parties

Louis Cherubin Vilpigue, the client, brought a small claims action before the Civil Division of the Court of Québec against two defendants: an individual, Stéphanie Mamseu Guemning (described as the “Souscriptrice” or subscriber/promoter), and the company Liyeplimal – Global Investment Trading S.A. (the “Entreprise”). The claim arose from an investment of CAD 10,298 in cryptocurrency “packs” marketed through Liyeplimal. The investment opportunity came to the client through his ex-partner, whose brother in Cameroon had invested in Liyeplimal and portrayed it as a booming crypto operation. The brother referred the client to an intermediary named Michel, who in turn connected him to Guemning, an active promoter for the enterprise and a local point of contact in Québec. The client watched several YouTube videos featuring Guemning enthusiastically promoting Liyeplimal, explaining how she claimed to have generated substantial income in a short period and even bought a Range Rover for her father with commission earnings. These videos and conversations portrayed Liyeplimal as highly profitable and encouraged others to invest and recruit additional investors.

Investment transaction and representations

On 6 September 2021, the client and his ex-partner went to Guemning’s home with CAD 11,000 in cash for him and CAD 20,000 in cash for her, intending to invest through Guemning into Liyeplimal. The meeting lasted about an hour to an hour and a half, with roughly thirty minutes devoted to opening the client’s account using the company’s application. Guemning received CAD 10,298 in cash from the client and CAD 20,000 from his ex-partner, and she then transferred from her own “cryptomonnaie active” account 6,400 units in favour of the client, corresponding to his investment. The parties slightly diverged on whether this represented six separate “packs” above CAD 1,000 each, or one pack of 6,400 units valued at CAD 10,298, but the court treated that issue as immaterial to liability. Following the meeting, the client received email confirmation from the company that an account had been opened and cryptocurrency deposited in his name via Liyeplimal’s platform. Liyeplimal maintained a website and promotional material touting substantial weekly, monthly, and annual returns. According to the client’s evidence, both the company and Guemning represented that he could readily double his investment within a year, with “extraordinary” returns, especially if he too became a recruiter and earned commissions on new investors. In her videos and communications, Guemning openly claimed that in about a year of involvement with Liyeplimal she had made more money than in ten years since arriving in Canada, including buying a high-end vehicle for her father through commissions generated by a team of around 300 people under her supervision.

Collapse of the investment and subsequent events

Approximately two months after the September 2021 investment, the value of the client’s holdings “collapsed” and became effectively worthless on the platform. Around December 2021 or January 2022, the client contacted Guemning to ask what had happened. She responded that she, too, had lost her placements with Liyeplimal. The client also testified that the brother of his ex-partner informed him the company was no longer operating in effect and that its CEO had left Africa, although these assertions were not corroborated through independent evidence or testimony. No documents were produced to the court to prove that Liyeplimal had gone bankrupt or been formally wound up; the only common ground was that the “cryptomonnaie active” and its returns no longer had any practical value. On 1 September 2024, the client served a formal demand letter on both Guemning and Liyeplimal, and he filed the present small claims action on 12 September 2024. Liyeplimal, though duly notified by email on 22 May 2025, did not file a defence and was in default. Guemning contested the claim and denied any contractual or extra-contractual fault.

Profile of the promoter and nature of the scheme

The court noted that Guemning did not have formal training in finance or cryptocurrency. Her background was as an employee of Bell Canada from 2011 to 2019, followed by a job at the Société de transport de Montréal from 2019 onward. She herself had been convinced to invest and then to become a representative by seeing attractive returns allegedly generated by a childhood friend. Despite her lack of formal financial credentials, Guemning’s videos and communications unequivocally encouraged people to invest and even to borrow money to invest, promoting Liyeplimal’s returns as substantial, even “exorbitant.” She claimed that investors could easily double their money within a year and earn additional income from commissions if they recruited new members, as she had done with her network of roughly 300 people. When questioned by the court about whether this structure resembled a Ponzi or pyramid scheme, she attempted to characterize it instead as “network marketing.” The judge, reviewing the documentary and testimonial evidence, concluded the operation was at least partially a pyramid selling system combined with an investment in “active cryptocurrency” within a pyramidal scheme. Guemning’s own description suggested she gained a return of about 6% to 10% on amounts invested by people she referred, in addition to whatever trading or platform returns she received. The court found that part of her operations clearly formed a pyramid-type structure, especially given her claims of large cash commissions sufficient to pay for an expensive Range Rover in a single year.

Risk disclosure, due diligence and contributory fault

A central issue was whether Guemning, as a promoter and referrer, had a duty to warn the client about the high risks and pyramidal nature of the scheme, and whether the client himself bore responsibility for failing to investigate. The court emphasised that Guemning never warned the client of the high risk of loss associated with investing in cryptocurrency and in a structurally pyramidal system. In both her online videos and in her face-to-face interactions, she delivered reassuring and overly optimistic statements about the safety and profitability of the investment, without any serious mention of downside risk or the possibility of losing the entire principal. She also did not disclose that she received commissions on the funds invested by the client and others, nor did she candidly describe the pyramid-like structure of the company. The judge held that these were material facts the client should have been told before deciding whether to invest. At the same time, the court did not treat the client as blameless. It noted that he had already been introduced to the opportunity by his ex-partner and her brother, and then by Michel, before ever meeting Guemning, and that he was already inclined to invest. When asked what research he had undertaken, the client admitted he relied essentially on conversations with his ex-partner, her brother, Michel, and Guemning, without conducting more substantive due diligence into the company, its regulatory status, or the structure and risk profile of the product. In this light, the court decided the client also failed to inquire into the dangers and pitfalls of such an investment, contributing to the loss.

Contractual framework and policy-style clauses

The client produced his written contract with Liyeplimal, which contained several key clauses governing refunds, “minor risk insurance,” exoneration of liability, and transfer conditions. Article 7 provided that an amount corresponding to the price of the purchased “pack” would be paid weekly to the buyer for 52 weeks, representing the purchase amount plus interest, with the first payment seven days after the buyer’s payment. Article 8, headed “Minor risk insurance and partial exoneration of the seller,” stated that if the financial program was not implemented, making it impossible to pay the promised interest, the seller undertook to reimburse the initial purchase amount of the pack plus 2% of that amount as damages. Article 9, under “Total exemption of the seller,” purported to completely exonerate the seller from liability in the case of “Major force,” defined as risks arising from unforeseen circumstances and phenomena beyond the seller’s control linked to expenses, negligence, or imprudence. Articles 10 and 11 concerned the transfer of digital assets between members, emphasising that transfers could only occur within the system and that users were responsible for ensuring the accuracy of the recipient’s ID and for logging into their accounts to carry out secure transactions. The court read these provisions as reinforcing the pyramid-like structure: returns and refunds were tied to ongoing program operations and the circulation of funds within an enclosed membership system, with a partial insurance promise yet broad exoneration language in cases of “Major force.” Ultimately, the company’s failure to honour its clear commitment in Article 8 to reimburse the initial purchase amount plus a small percentage where its financial program was not implemented was central to the finding of contractual liability.

Legal issues and burden of proof

The court applied the ordinary civil burden of proof by preponderance of evidence under the Civil Code of Québec. The client had to demonstrate either contractual or extra-contractual fault resulting in damages, while the defendants had to prove the absence of such fault. The judge recalled Canadian and Québec authorities on distinguishing mere possibility from probability and on the need for clear and convincing evidence to satisfy the balance of probabilities standard in civil litigation. No expert evidence was filed by any party, and the court was therefore limited to lay testimony, documentary contracts, and the surrounding circumstances. The judge also highlighted the volatile and relatively new nature of the cryptocurrency market and the lack of comprehensive provincial or federal regulation, placing greater importance on honest disclosure and cautionary communication from those who induce others to invest.

Findings on liability of the company and the promoter

As to Liyeplimal – Global Investment Trading S.A., the court found that the company had made written representations in the contract that it failed to respect. It had committed itself contractually to refund the purchase amount in defined circumstances and had not honoured that obligation. The company was duly put in default and took no steps to contest the claim. On this basis, the judge held the company civilly liable for the full amount of the client’s investment. As to Stéphanie Mamseu Guemning, the court concluded that her conduct amounted to extra-contractual fault. By portraying the investment as safe and highly profitable, failing to mention its high-risk nature and pyramidal structure, and not disclosing her own commission-based interest in recruiting the client, she breached a duty of prudence and loyalty owed to someone she was inducing to commit significant capital. However, because other actors (the ex-partner, her brother, and Michel) also influenced the decision and because the client himself conducted little independent verification, the court did not place the entire loss on her shoulders. Instead, it apportioned liability, attributing 15% of the loss to her fault. The court rejected her assertion that she had received no commission on the client’s investment, noting her reluctance to explain payment modalities and her own claims of large commission-based income.

Apportionment of damages and outcome

Having determined that both defendants bore responsibility, the court quantified and allocated damages. It fixed Guemning’s share of civil liability at 15% of the client’s loss, translating to CAD 1,544.70. Against her, the court ordered payment of that amount to the client, with legal interest and the additional indemnity provided by Article 1619 of the Civil Code of Québec, running from the date of formal notice (1 September 2024), plus costs. As to Liyeplimal, the court fully allowed the claim based on the contractual undertaking in the investment agreement and its failure to reimburse the client. It condemned the company to pay CAD 10,298, with legal interest and the additional indemnity from 1 September 2024, plus court costs. There is no precise numerical figure stated for the total interest, additional indemnity, or costs, so those components cannot be quantified exactly from the judgment alone. Overall, the successful party is the client, Louis Cherubin Vilpigue, who obtained a total principal award of CAD 11,842.70 (CAD 1,544.70 from Guemning and CAD 10,298 from Liyeplimal), plus unquantified interest, additional indemnity, and court costs in his favour.