U.S. SEC charges 11 Forsage officials for promoting crypto Ponzi Scheme

The U.S. Securities and Exchange Commission charges 11 individuals from Forsage for promoting a crypto-focused Ponzi scheme on Monday, CNBC reports.

The firm claimed to be a decentralized networking platform that would allow retail investors to enter transactions via smart contracts on Ethereum, Binance, and Tron blockchains.

Forsage founders, promoters, and other directors promoted a fraudulent scheme and managed to raise $300M dollars from the investors.

The founders, Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov, formed a perfect Ethereum-based dApp in 2020 to fool people out of millions of dollars.

SEC shared that the company worked as a “standard pyramid scheme” for over two years. The dApp used the unregistered offer and sale of securities in Forsage from retail investors to raise funds.

“When an investor purchased a slot, a portion of that investment was directed to the persons who recruited the investor (the “uplines”), and the investor, in turn, became an upline to whomever the investor recruited. Thus, all payouts to earlier investors were made using funds received from later investors,” stated the SEC complaint.

As of now, the founders are nowhere to be located, while two of the promoters have agreed to fulfill the charges.

The regulators have been trying to shut it down since its launch. Forsage was first charged by the SEC of the Philippines and later by the Montana commissioner of securities and insurance.

Finally, the U.S authorities were able to charge them this time.