The US SEC charges 11 people with organizing the scheme

Reading time:< 1 minute

The US Securities and Exchange Commission (SEC) has charged 11 people for their role in creating and promoting a pyramid and Ponzi scheme that raised more than $300 million from retail investors around the world, including The United States, Reuters reports.

Among those accused are the four founders of the scheme called Forsage. They were last known to live in Russia, the Republic of Georgia and Indonesia, the SEC said in a statement.

The accused could not immediately be reached for comment.

According to the SEC complaint, the scheme’s website was launched in January 2020 and allowed millions of retail investors to transact through smart contracts. It allegedly operated as a pyramid scheme for more than two years, in which investors made profits by recruiting others into the scheme, the SEC said.

Forsage also allegedly used assets from new investors to pay off previous investors in a typical Ponzi structure, according to the SEC complaint.

“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 and Cyber ​​Assets Unit.

“Fraudsters cannot circumvent federal securities laws by focusing their schemes on smart contracts and blockchain,” according to the SEC.

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.