Eleven people have been charged for their roles in the creation and promotion of Forsage, a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from millions of retail investors worldwide, according to a press release issued by the US Securities and Exchange Commission (SEC) on August 1.
Forsage.io was a platform that allowed millions of retail investors to transact by using smart contracts that worked on the Ethereum, Tron, and Binance blockchains. Vladimir Okhotnikov, Jane Doe, a.k.a. Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov, created it in January 2020.
Forsage’s guiding principle was that there was nothing to sell. Therefore, recruiting others to Forsage was the only option to earn money.
The SEC’s charges cover the four Forsage founders, three American promoters that the founders recruited to promote Forsage on their websites and social media pages, as well as several members of the “Crypto Crusaders”.
According to the SEC’s statement, Forsage allegedly operated as a pyramid scheme for more than two years, where investors profited by recruiting others to participate. To repay previous investors, Forsage engaged in a classic Ponzi scheme that illegally used assets from new investors.
In March 2021 and September 2020, respectively, the Securities and Exchange Commission of the Philippines and the Montana Commissioner of Securities and Insurance issued cease-and-desist orders against Forsage for conducting a scam. Forsage allegedly continued to promote the plan despite the accusations while refuting them in several YouTube videos and other ways.