Forsage crypto executives charged with running $300 million Ponzi scheme

Forsage crypto executives charged with running $300 million Ponzi scheme

Summary : Eleven people who ran and promoted cryptocurrency firm Forsage are facing charges they operated a Ponzi scheme that raised more than $300 million from millions of investors in the U.S. and elsewhere, according to the Securities and Exchange Commission.

The Forsage executives posted videos that promised huge returns for investors, with one calling it “a powerful long-term source of passive income” and telling viewers, “Forsage means fast and furious.”

But securities regulators allege the service’s founders weren’t providing an investment strategy, but rather running a pyramid scheme, where investors made money by recruiting others. In the case of Forsage, the service was created in 2020 by targeting retail investors who wanted to enter into crypto transactions via so-called “smart contracts” that operated on the Ethereum, Tron, and Binance blockchains.

Aside from the four founders who were charged with running a Ponzi scheme, the SEC also charged three U.S.-based promoters hired by Forsage to tout the service as well as several members of the Crypto Crusaders, a promotional group for the service, the SEC said.

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit, in a statement.

Eleven people who ran and promoted cryptocurrency firm Forsage are facing charges they operated a Ponzi scheme that raised more than $300 million from millions of investors in the U.S. and elsewhere, according to the Securities and Exchange Commission.The Forsage executives posted videos that promised huge returns for investors, with one calling it “a powerful long-term source of passive income” and telling viewers, “Forsage means fast and furious.”But securities regulators allege the service’s founders weren’t providing an investment strategy, but rather running a pyramid scheme, where investors made money by recruiting others. Earlier investors were paid through the money invested by newer customers, the hallmark of a classic Ponzi scheme.The charges underscore the financial risks of a sector that has drawn a fair share of fraudsters and scammers, aside from the massive price plunges that crypto currencies have experienced this year. In the case of Forsage, the service was created in 2020 by targeting retail investors who wanted to enter into crypto transactions via so-called “smart contracts” that operated on the Ethereum, Tron, and Binance blockchains.But instead, the plan operated like a pyramid scheme, with people earning money by recruiting new customers into the service, the SEC alleges.Aside from the four founders who were charged with running a Ponzi scheme, the SEC also charged three U.S.-based promoters hired by Forsage to tout the service as well as several members of the Crypto Crusaders, a promotional group for the service, the SEC said.”As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit, in a statement.The four founders are: Vladimir Okhotnikov, Jane Doe (known by her pseudonym Lola Ferrari), Mikhail Sergeev and Sergey Maslakov. Also charged were several Americans who were hired by Forsage to tout the service, such as one promoter who claimed she had invested $1,600 and earned more than $1 million in seven months, the complaint alleges.

The four founders were last known to be living in Russia, the Republic of Georgia and Indonesia, the SEC said.

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