SEC charges 11 people over ‘textbook’ $300 million crypto Ponzi scheme

It is a day of the week ending with the letter “y”, which inevitably means there is news in the cryptocurrency world. The Securities and Exchange Commission has indicted 11 people who allegedly founded and promoted Forsage, which was a crypto Ponzi scheme that raised over $300 million from retail investors.

The agency claims that Forsage has enabled millions of people to conduct transactions through smart contracts on the Ethereum, Tron, and Binance blockchains. It has been claimed that for over two years, Forsage has essentially operated as a pyramid scheme where the main way for investors to make money was to lure other people into the scheme. “Fraudsters cannot circumvent federal securities laws by focusing their systems on smart contracts and blockchains,” said Carolyn Welshhans, acting head of the SEC’s Crypto Assets and Cyber ​​Unit.

“Forsage is a Textbook Pyramid and Ponzi Scheme”, . “It has not sold or claimed to sell any actual, consumable product to bona fide retail customers during the relevant period and has had no apparent source of income other than funds received from investors.”

Four of the defendants are the founders of Forsage, who were last known to reside in Russia, the Republic of Georgia and Indonesia. The SEC has also indicted three US-based promoters that the founders allegedly recruited to endorse Forsage on their website and social media. Several members of a group called Crypto Crusaders, a group that promoted the program, have also been charged with violating the registration and anti-fraud provisions of federal securities laws. Two defendants have agreed to settle the charges without admitting or denying the allegations.

As notes that the founders of Forsage launched the platform in January 2020. Regulators in the Philippines and Montana tried to shut them down with injunctions. The SEC claimed the defendants continued to promote Forsage while dismissing claims made against the platform in YouTube videos.

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https://www.engadget.com/sec-cryptocurrency-ponzi-scheme-forsage-175718451.html?src=rss SEC charges 11 people over ‘textbook’ $300 million crypto Ponzi scheme

Russell Falcon

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