$300M Crypto Pyramid Scheme 'Forsage': 11 People Charged by US SEC
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Reports state that the scheme raised over $300 million from retail investors all across the globe, including the United States. The Ponzi scheme was named 'Forsage' by its four founders. The SEC noted that two of the four defendants agreed to settle the charges, and one agreed to pay the penalties without admitting or denying the guilt.
Forsage Gathered Millions Of Dollars From Retail Investors
Carolyn Welshhans, acting chief of the SEC's Crypto Assets and Cyber unit, said,
"Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors. Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains."
The website of Forsage allowed retail investors to commit transactions via smart contracts. As stated by the SEC, the accused individuals were living in Russia, the Republic of Georgia, and Indonesia.
Forsage launched its website in January 2020, according to SEC's complaint. The website gave access to retail investors to enter transactions via smart contracts. Forsage has successfully worked as a pyramid scheme for the past two years and gathered a total of $300 million, the SEC reported. Thus, Forsage transferred the assets of the new investors to the old investors as it happens in a Ponzi scheme.