SEC accuses Forsage founders of promoting a $300 million crypto pyramid

The U.S. Securities and Exchange Commission (SEC) обвинила eleven people for creating and promoting the Forsage cryptocurrency pyramid, which drew more than $300 million from investors worldwide.

Among the defendants were four Forsage founders, who lived in Russia, Georgia and Indonesia, as well as several U.S. residents who promoted the fraudulent scheme online.

According to the SEC, in January 2020 Vladimir Okhotnikov, Mikhail Sergeev, Sergey Maslakov and Jane Doe (also Lola Ferrari) launched the Forsage.io site. Through it, millions of retail investors could engage in deals via smart contracts operating on the Ethereum, Tron and Binance blockchains.

However, Forsage was in fact a financial pyramid, whose participants earned profits by recruiting new investors, according to the SEC.

In 2020, the Philippine Securities and Exchange Commission said Forsage exhibited signs of a financial pyramid. In March 2021, Montana regulators also declared the project a fraudulent scheme.

Nevertheless, the pyramid’s founders continued to promote it, denying the charges in YouTube videos and by other means, the SEC noted.

According to Dune Analytics, 728,711 ETH has been sent to the project.

In 2020, researchers noted that Forsage’s Ponzi-scheme activity triggered a rise in Ethereum network fees and gas prices.

Vitalik Buterin, co-founder of Ethereum, also warned about Forsage fraud , comparing the project to Bitconnect and Onecoin.

Read ForkLog’s bitcoin news in our Telegram — cryptocurrency news, prices and analysis.