According to a lawsuit filed in US District Court on August 1, SEC accused founders and promoters of Forsage who used “the fraudulent crypto pyramid and Ponzi scheme” to raise over $300M from millions of retail investors around the world.
Forsage proclaims itself a decentralized smart contract platform that allows millions of retail investors to participate in trading activities on the Ethereum, Tron, and Binance blockchains. For more than two years, Forsage has run a ponzi scheme that took advantage of investors by recruiting new investors to the platform. Previous investors will gain profits with funds from more recent investors.
“Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains”, Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit said.
4 of the 11 individuals charged by SEC were the founders of Forsage. The current location of these people is still unknown but most recently they have been found in Russia, the Republic of Georgia and Indonesia. In addition, SEC also charged 3 other people who helped promote Forsage on social platforms, however, their identities have not yet been revealed.
Forsage was launched in January 2020 and has been investigated by the authorities several times. In September 2020, Forsage was subject to a cease-and-desist order from the Philippine SEC. In March 2021, the platform also received a cease and desist order from the Montana Securities and Insurance Commissioner. Even so, Forsage has stubbornly continued to promote their projects until now.
A Youtube channel that claims to be an official channel of Forsage has attracted about 170,000 views and 6,500 subscribers. In some videos, many people are excited to share how their lives have been improved thanks to Forsage. At the same time, the Forsage website claims the project has attracted more than 2 million participants and has rewarded more than $1.35 billion to customers.
Two of the defendants neither admitted nor denied the charges, but agreed to a settlement based on the court’s decision. However, Forsage declined to respond and made no further comment.
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