Against the Forsage Crypto Scheme, the SEC acts
According to a statement released on Monday by the U.S. Securities and Exchange Commission (SEC), “11 persons have been charged for their involvement in developing and marketing Forsage, a fraudulent crypto pyramid and Ponzi scheme.” According to the securities authority, the Forsage scam generated more than $300 million from countless numbers of individual investors throughout the globe, including those in the United States.
Four Forsage founders are among the 11 defendants, along with three scheme promoters who are domiciled in the United States and “many members of the so-called Crypto Crusaders, the main promotional organization for the scam that operated in the United States,” according to the SEC. The founders were last identified as residing in Indonesia, the Russian Federation, and the Republic of Georgia.
The securities watchdog specified that the Forsage.io website was established in January 2020 by Vladimir Okhotnikov, Jane Doe (also known as Lola Ferrari), Mikhail Sergeev, and Sergey Maslakov to enable retail investors to engage in transactions via smart contracts on the Ethereum, Tron, and Binance blockchains.
But the SEC said that “Forsage also allegedly utilized assets from new investors to pay earlier investors in a conventional Ponzi structure,” adding that “Forsage also used assets from new investors to entice others into the scam.”
The SEC’s Crypto Assets and Cyber Unit’s acting chief, Carolyn Welshhans, made the following statement:
As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors.
A few authorities have made an effort to forbid Forsage from functioning in their areas. The Montana Commissioner of Securities and Insurance initiated action against the scam in March 2021, while the Securities and Exchange Commission of the Philippines began taking cease-and-desist procedures against Forsage in September 2020. Forsage continues to operate despite the accusations being refuted in YouTube videos.
The SEC stated that it “seeks injunctive relief, disgorgement, and civil penalties” against the defendants for “violating the registration and anti-fraud sections of the federal securities laws.”
Without acknowledging or disputing the claims, two of the promoters indicted before consented to settle the charges. They will have to pay civil fines as well as disgorgement. The judge must approve both agreements.