U.S. SEC Charges Forsage Founders for $300M Crypto Pyramid Scheme

The United States Securities and Exchange Commission (SEC) announced Monday that it had filed charges against four individuals alleged to be the founders of Forsage. The securities market regulator alleges that Forsage is a crypto-based pyramid scheme that has amassed over $300 million from investors in different countries, including the United States.

The Forsage team provides smart contracts on Ethereum, BNB Chain, and Tron blockchain for members to lock assets. Members also receive affiliate links for onboarding others to the scheme to boost their earnings potential. According to information available on the Forsage website at the time of writing, it costs approximately 0.05 ETH ($80) to obtain the lowest registration on Ethereum. However, the amount is lesser for Tron and BNB networks.

The four alleged masterminds, Vladimir Okhotnikov, Jane Doe (a.k.a. Lola Ferrari), Mikhail Sergeev, and Sergey Maslakov, allegedly launched Forsage in January 2020, advertising it as a way for investors to earn more income on their crypto assets. However, the founders operated the business as a pyramid scheme, typically collecting money from new investors to pay for existing ones.

The SEC further alleges that Forsage retained the services of U.S.-based promoters and a certain “Crypto Crusaders” community to advertise the scheme and recruit new members. Additionally, following two cease-and-desist orders from securities regulators in the Philippines and Montana, the project misled investors by denying in several YouTube videos that it was operating a Ponzi scheme.

Alleged Forsage Promoters Settle Charges

Following today’s SEC announcement, two of the seven listed U.S.-based Forsage promoters, Samuel Elis and Sarah Thiessen, have settled charges without accepting or denying the claims. Both individuals have been paid civil penalties and disgorgement while the SEC continues pursuing action against other promoters.

Meanwhile, the latest action against Forsage makes it the second most popular crypto scheme busted by the U.S. SEC. Last year, the regulator also charged five individuals behind the $2 billion crypto-ponzi project, Bitconnect.

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