SEC Charges 11 People in Forsage Crypto Pyramid and $300 Million Ponzi Scheme – Regulation Bitcoin News

SEC Charges 11 People in Forsage Crypto Pyramid and $300 Million Ponzi Scheme – Regulation Bitcoin News

The US Securities and Exchange Commission (SEC) indicted the four founders and seven promoters of Forsage, which it described as a “fraudulent crypto pyramid and Ponzi scheme”. The scheme has reportedly raised more than $300 million from millions of retail investors worldwide, including in the US

SEC takes action against Forsage crypto scheme

The US Securities and Exchange Commission (SEC) announced on Monday that it had “indicted 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme”. Securities regulator explained that the Forsage scheme has raised more than $300 million from millions of retail investors around the world, including the U.S.

The 11 defendants are the four founders of Forsage, three US-based promoters of the scheme and “several members of the so-called Crypto Crusaders – the largest promotional group for the scheme that operated in the United States,” the SEC described. The founders were last known to live in Russia, the Republic of Georgia and Indonesia.

The securities watchdog detailed that Vladimir Okhotnikov, Jane Doe (aka Lola Ferrari), Mikhail Sergeev and Sergey Maslakov launched the website in January 2020 to allow retail investors to enter into transactions via Ethereum smart contracts, Tron and Binance blockchains.

However, Forsage investors made profits by recruiting others into the scheme, the SEC said, noting that “Forsage also allegedly used funds from new investors to pay off earlier investors in a typical Ponzi structure.”

Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber ​​Unit, commented:

According to the lawsuit, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors.

Some regulators have tried to prevent Forsage from operating in their jurisdictions. Securities and Exchange Commission of the Philippines launched Actions against Forsage were halted in September 2020, and the Montana Securities and Insurance Commissioner took action against the scheme in March 2021. However, Forsage continued to operate, denying the allegations in YouTube videos.

The SEC accused the defendants of “violating the registration and anti-fraud provisions of the federal securities laws,” the regulator noted, adding that it is “seeking injunctive relief, disgorgement and civil penalties.”

The two accused promoters have already agreed to settle the charges without admitting or denying the allegations. They will be required to pay disgorgement and civil penalties. Both settlements are subject to court approval.

Tags in this story

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What do you think about the SEC taking action against Forsage’s founders and promoters? Let us know in the comments section below.

SEC Charges 11 People in Forsage Crypto Pyramid and $300 Million Ponzi Scheme – Regulation Bitcoin News

Kevin Helms

An Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in bitcoin security, open-source systems, network effects, and the intersection between economics and cryptography.

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