News

SEC Uncovered A $300 Million Crypto Pyramid Scheme

The United States Securities and Exchange Commission (SEC) has filed a civil complaint against 11 people behind a Ponzi scheme that defrauded more than $300 million.
SEC Uncovered A $300 Million Crypto Pyramid Scheme 4

According to a filing filed with the U.S. District Court on August 1, the SEC alleges that the founders and promoters of the Forsage platform used a “fraud pyramid and multi-level Ponzi scheme” to raise over $300 million from millions of retail investors worldwide.

The decentralized finance (DeFi) ecosystem and initial coin offerings (ICOs) have contributed to Ethereum’s growth in several ways. The Forsage gifting pyramid scam is one such strategy that cryptocurrency users are now debating.

Forsage claims to be a decentralized smart contract platform that allows millions of retail investors to participate in trading on the Ethereum, Tron, and Binance blockchains.

SEC Uncovered A $300 Million Crypto Pyramid Scheme 5

The SEC alleges that it has operated under a typical Ponzi scheme for more than two years. Specifically, taking advantage of investors for personal gain by recruiting and recruiting more people to join the organization, taking money from the latter to pay the former.

Carolyn Welshhans, the representative of the unit leading the investigation, said:

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors. Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

Four of the 11 individuals charged by the SEC were the founders of Forsage. Their current whereabouts are unknown, but they have recently been in Russia, the Republic of Georgia, and Indonesia.

In addition, the SEC also charged three other people with assisting in promoting Forsage on social media platforms. However, the committee did not specify who they were.

Forsage was launched in January 2020 and has been touched by regulators worldwide a few times. Forsage was first surfaced in September 2020 by the Philippine Securities and Exchange Commission. By March 2021, the Montana Securities and Insurance Commission also stepped in. Even so, the defendants have continued to promote their projects.

SEC Uncovered A $300 Million Crypto Pyramid Scheme 6

A Youtube channel claiming to be the official channel of Forsage has attracted about 170,000 views and has about 6,500 subscribers. In some videos (the longest is about a minute), many people are excited to share how their lives have been improved thanks to Forsage.

At the same time, Forsage’s website claims the project has attracted more than 2 million participants and claims to have rewarded more than $1.35 billion to customers.

Two defendants neither admitted nor denied the charges but agreed to a settlement subject to the court’s decision. Song Forsage declined to provide a method of contacting the company and was not immediately available for comment.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Harold

CoinCu News

Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

Recent Posts

Best Cryptos for Significant Gains: Qubetics Completes 3,500 Buyers as Near Protocol and Toncoin Test Resistance Levels

Explore the best cryptos for significant gains! Qubetics presale soars past $2.7M, while NEAR and…

53 seconds ago

Best Cryptos to Invest in November 2024: Solana (SOL), Cardano (ADA), and Rexas Finance (RXS)

Smart investors have chosen Solana, Cardano, and Rexas Finance among several clearly profitable cryptocurrencies to…

4 hours ago

Highly Anticipated Spot Solana ETFs Will Be Approved in 2025

Industry experts predict spot Solana ETFs may gain approval by late 2025, buoyed by a…

10 hours ago

Cantor Fitzgerald Will Acquire 5% Ownership Interest in Tether

Wall Street financial services giant Cantor Fitzgerald is all set to purchase a 5% stake…

10 hours ago

XRP Price Hits $1 Following Rumors Of Trump Meeting With Ripples CEO, What To Expect Next

The XRP price recently surpassed $1 after rumors sparked about Donald Trump meeting its CEO;…

11 hours ago

Navigating November’s Crypto Trends: What Makes Qubetics, Monero, and Celestia Stand Out?

Discover why Qubetics, Monero, and Celestia are among the best cryptos to buy in November…

14 hours ago

This website uses cookies.