The U.S. Securities and Exchange Commission (SEC) has indicted four founders and seven promoters of Forsage, which it described as “a fraudulent crypto pyramid and Ponzi scheme.” The program has reportedly raised over $300 million from millions of retail investors globally, including in the United States.
SEC Takes Action Against Forsage Crypto Program
The U.S. Securities and Exchange Commission (SEC) announced on Monday that it had “indicted 11 people for their role in creating and promoting Forsage, a fraudulent crypto-pyramid and Ponzi scheme.” The securities regulator Explain that the Forsage program has raised over $300 million from millions of retail investors globally, including in the United States
The 11 defendants are four Forsage founders, three U.S.-based promoters of the program, and “several members of the so-called Crypto Crusaders — the largest promotional group for the program that operated in the United States,” the SEC described. The founders last lived in Russia, the Republic of Georgia and Indonesia.
The securities watchdog clarified that Vladimir Okhotnikov, Jane Doe (aka Lola Ferrari), Mikhail Sergeev and Sergey Maslakov launched the Forsage.io website in January 2020 to allow retail investors to complete transactions via smart contracts on Ethereum, Tron and Binance. blockchains.
However, Forsage’s investors made a profit by recruiting others into the scheme, the SEC said, noting that “Forsage would also have used assets from new investors to pay off previous investors in a typical Ponzi scheme.”
Carolyn Welshhans, acting head of the SEC’s Crypto Assets and Cyber Unit, commented:
As the complaint alleges, Forsage is a fraudulent pyramid scheme launched at scale and aggressively marketed to investors.
Some regulators have attempted to block Forsage from operating in their jurisdictions. The Philippine Securities and Exchange Commission spear cease and desist actions against Forsage in September 2020 and the Montana Securities and Insurance Commissioner took action against the scheme in March 2021. However, Forsage continued operations, denying the allegations in Youtube videos .
The SEC charged the defendants “with violating the registration and anti-fraud provisions of the federal securities laws,” the regulator noted, adding that it “seeks injunctive relief, reimbursement and civil penalties.” .
Two of the charged promoters have already agreed to settle the charges without admitting or denying the allegations. They will be required to pay restitution and civil penalties. Both settlements are subject to court approval.
What do you think of the SEC’s action against the founders and promoters of Forsage? Let us know in the comments section below.
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