What is Happening With Forsage?

Updated on 12 September, 2022 11:45 AM
1 min read

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    What is Forsage?

    The value of cryptocurrencies as profitable investment options is slowly spreading around the world. Regrettably, the rise in popularity has also seen an increase in cryptocurrency scams. Forsage is accused of defrauding small-time investors of $300 million by employing aggressive marketing strategies spread over social media.

    Forsage is a fraudulent pyramid scheme that was actively pushed to investors and was started on a large scale, according to Carolyn Welshhans, acting chief of the SEC's Crypto Assets and Cyber section. He also stated that by concentrating their scams on smart contracts and blockchains, fraudsters cannot get around federal securities rules.

    Is Forsage Illegal?

    The US Securities and Exchange Commission (SEC) announced on August 1 that it has filed charges against 11 individuals for their roles in the development and promotion of a fraudulent cryptocurrency pyramid and Ponzi scheme that raised more than $300 million worldwide.

    Forsage - Who are the main accused?

    The four creators of the Forsage plan were among those accused, according to Reuters. Four of the founders of Forsage, Vladimir Okhotnikov, Jane Doe (also known as Lola Ferrari), Mikhail Sergeev, and Sergey Maslakov, are among those accused. They were last identified as residing in Indonesia, Georgia, and Russia.

    What happens on Forsage?

    Forsage was among the most notable decentralized Ethereum (ETH) blockchain systems.. With the debut of Forsage in January 2020, millions of ordinary investors were able to do business using smart contracts, which allow trading without the control of centralized power. These smart contracts were run on the blockchains of Ethereum, Tron, and Binance.


    What are the charges against Forsage?

    Investors benefited financially throughout its nearly two-year run as a pyramid scheme by enlisting new participants. To acquire money from new clients and compensate the existing investors, it is alleged that Forsage operated this illegal pyramid scheme.

    Dune data analytics claim that $20 million worth of ETH tokens were transmitted to Forsage in a given day in July 2020. The Securities and Exchange Commission (SEC) of the Philippines issued a cease-and-desist order to the business that same year for conducting fraudulent business there. A similar directive had been delivered to Forsage by the Montana Commissioner of Securities and Insurance in 2021.

    The SEC stated that all payouts to early investors were made with money obtained from later investors. The accused allegedly persisted in promoting the scheme through distinct communication platforms, notably YouTube videos, and denied any wrongdoing.


    What are Ponzi schemes – beware of them

    Ponzi schemes are deceptive schemes used to entice customers by promising quick money-making opportunities, particularly in relation to cutting-edge technology like blockchain, smart contracts, and decentralized applications.  According to reports, investors denied that Forsage was a Ponzi scheme and continued to promote it on social media.

    Other people accused in the forsage case

    Along with the four Forsage founders, the SEC also accused Cheri Beth Bowen of Mississippi, Ronald R. Deering of Coeur d'Alene from Idaho, Samuel D. Ellis of Louisville, Kentucky, Mark F. Hamlin of Virginia, Carlos L. Martinez of Chicago, Illinois, Alisha R. Shepperd of Dunedin, Florida, and Sarah L. Theissen of Hartford, Wisconsin.They were all charged with the allegations of violating the registration and anti-fraud.

    Future of forsage

    Without admitting or rejecting the claims, two of the defendants and one of them consented to pay fines, according to the SEC. It is still to be observed what actions are to be taken by the SEC against Forsage and the numerous accused of fraud .

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