SEC Charges 11 Persons in $300 Million From Forsage Crypto Pyramid and Ponzi Scheme – Regulation Bitcoin News


The US Securities and Exchange Commission (SEC) has indicted four founders and seven promoters of Forsage, which it called a “fraudulent crypto-pyramid scheme and a Ponzi scheme.” The scheme allegedly raised more than $300 million from millions of retail investors around the world, including in the United States.

SEC takes action against Forsage crypto system

The US Securities and Exchange Commission (SEC) announced Monday that it has “indicted 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme.” stock regulator explained Forsage scheme has raised more than $300 million from millions of individual investors around the world, including in the United States

The 11 defendants are the four founders of Forsage, three US promoters of the scheme, and “several members of the so-called Crypto Crusaders – the largest promotion group for the scheme operated in the US,” the Securities and Exchange Commission described. The founders were last known to live in Russia, the Republic of Georgia and Indonesia.

The SEC reported that Vladimir Okhotnikov, Jane Doe (also known as Lola Ferrari), Mikhail Sergeyev, and Sergey Maslakov launched Forsage.io in January 2020 to allow individual investors to enter into transactions via smart contracts on the Ethereum, Tron, and Binance blockchain.

However, Forsage investors made profits by recruiting others into the scheme, the SEC said, noting that “Forsage also allegedly used assets from new investors to pay previous investors into a typical Ponzi structure.”

Caroline Welshans, Acting Head of the Securities and Exchange Commission’s Crypto Assets and Cyber ​​Unit, commented:

As the complaint alleges, Forsage is a massively launched and aggressively marketed fraudulent pyramid scheme to investors.

Some regulators have tried to prevent Forsage from operating in their jurisdictions. The Philippines Securities and Exchange Commission launched cease-and-desist actions against Forsage in September 2020 and the Montana Securities and Insurance Commissioner took action against the scheme in March 2021. However, Forsage continued its operations, denying the allegations in YouTube videos.

The regulator noted that the Securities and Exchange Commission accused the defendants of “violating the registration and anti-fraud provisions of the federal securities laws,” adding that it was “seeking injunctive relief, removal, and civil penalties.”

Two of the promoters already accused have agreed to settle the charges without admitting or denying the allegations. They will be required to pay civil fines. Both settlements are subject to court approval.

Tags in this story

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What do you think of the SEC taking action against the founders and promoters of Forsage? Let us know in the comments section below.

Kevin Helms

Kevin, an Austrian economics student, found Bitcoin in 2011 and has been a missionary ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection of economics and cryptography.

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