The “fraudsters” in the $300 million “Crypto Pyramid and Ponzi Scheme” were accused by the SEC

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It was impossible to get in touch with the accused people right away for remark.

According to the SEC complaint, Forsage also allegedly used assets from new investors to pay off prior investors in a conventional Ponzi scheme.

Without admitting or denying the allegations, two of the defendants agreed to settle the charges and one of them agreed to pay penalties, the SEC said.

“Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber unit. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

Story Highlights

  • The four Forsage scheme founders were among those accused. The SEC said in a statement that they were last identified as having addresses in Indonesia, the Republic of Georgia, and Russia.

  • The website for the plan reportedly went live in January 2020 and allowed millions of individual investors to transact using smart contracts. According to the SEC, it allegedly ran as a pyramid scheme for more than two years during which time investors made money by enlisting new participants.