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The US Securities and Exchange Commission (SEC) charges fraud against eleven people behind blockchain platform Forsage.
The SEC says that the eleven allegedly “created, operated and maintained an online pyramid and Ponzi scheme through Forsage.io.”
According to the SEC, Forsage has been in business since at least January 31, 2020, and has received capital from US private investors and others scattered around the world.
“During the relevant time period, the Founders raised capital from private investors in the United States and around the world through the unregistered offering and sale of securities in Forsage.
In connection with the offering and sale of these securities, the Founders engaged in a scheme to defraud investors and further engaged in practices that operated to defraud or deceive those investors.”
The SEC says the alleged Ponzi scheme, which has raised more than $300 million so far, operated on the Binance (BNB), Ethereum (ETH) and Tron (TRX) blockchains.
“[Forsage.io] allowed millions of private investors to enter [the] United States and elsewhere to transact through smart contracts created by the Founders running on the Ethereum, Tron and Binance blockchains. To date, these transactions have exceeded $300 million.”
According to the SEC, Forsage relied on new deposits to pay earlier investors as it allegedly had no other known source of revenue.
“Forsage is a textbook pyramid scheme and Ponzi scheme. It did not sell or purport to sell actual, consumable product to bona fide retail customers during the relevant time period and had no apparent source of revenue other than funds received from investors.
The primary way for investors to make money from Forsage was to recruit others into the program…
Thus, all payments to earlier investors were made using funds received from later investors.”
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Featured image: Shutterstock/sakkmesterke/Sensvector
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