Crypto Pyramid Scheme Forsage Us Sec Charges 11 Individuals In Usd 300 Million Scam Ponzi Plan

Cryptocurrencies are slowly gaining recognition around the world as lucrative investment opportunities. Unfortunately, the growing popularity has also led to a rise in scams involving crypto coins. On August 1, the US Securities and Exchange Commission (SEC) said that it has charged 11 people for their roles in creating and promoting a fraudulent crypto pyramid and Ponzi scheme, raising over $300 million across the globe. As reported by Reuters, the individuals charged included the four founders of the scheme, called Forsage.

The SEC said in its statement that the founders were last known to be residing in Russia, Indonesia, and the Republic of Georgia. The Forsage website was launched in January 2020, as per SEC’s complaint. It reportedly allowed millions of investors to enter into transactions via ‘smart contracts’. In its nearly two-year-long operation as a pyramid scheme, investors earned profits by recruiting others.

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The complaint also noted that Forsage allegedly used assets from new investors to pay earlier 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 SEC added that two of the defendants have agreed to settle charges and one of them agreed to pay penalties, without admitting or denying the allegations. 

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