A U.S. court has charged four Russians with organising and promoting the Forsage cryptocurrency pyramid, whose victims around the world lost approximately $340 million.
Forsage Founders Indicted in $340M DeFi Crypto Scheme
First Charged Criminal Fraud Case Involving a DeFi Ponzi Schemehttps://t.co/s9xu3evTiQ
— Criminal Division (@DOJCrimDiv) February 22, 2023
A federal grand jury in Oregon returned an indictment against Vladimir Ohotnikov (Lado), Olena Oblamskaya (Lola Ferrari), Mikhail Sergeev (Mike Mooney, Gleb or Gleb Million) and Sergey Maslakov.
According to court documents, these Russian nationals marketed the purported DeFi platform Forsage as a ‘matrix project’ based on network marketing and smart contracts.
The defendants promoted Forsage through social media as a legal and profitable business opportunity, ‘but in reality ran the project as a Ponzi scheme and an investment pyramid’.
According to law enforcement, the defendants deployed smart contracts that ‘systematised’ a platform operating on Ethereum, BNB Chain and Tron. The software automatically diverted a portion of new investors’ funds to earlier participants. One of the contracts (xGold) sent assets to accounts controlled by the founders.
On-chain analysis showed that more than 80% of Forsage investors recovered less than they invested. More than 50% of users did not receive any payouts.
Under charges of conspiracy to commit wire fraud, the scheme’s organisers face up to 20 years in prison.
Earlier in August 2022, SEC filed a civil suit against the founders and providers of Forsage.