The SEC sued Forsage’s promoters. The most classic of pyramid schemes, but on the blockchain: that was enough to steal 300 million dollars.
The SEC , the American authority that oversees the American stock exchange and financial products in general, has targeted an alleged Ponzi scheme linked to cryptocurrencies . There are 11 people accused of having created and promoted what appears to be a pyramid scheme.
It is called Forsage and according to the SEC the project was entirely based on a fraudulent scheme, that is through the simulation of immense gains guaranteed to the first investors exclusively by the constant influx of new capital introduced by new investors, in turn deceived by the amazing promises of the founders of the project.
According to the American authority, this criminal scheme would have stolen investors over 300 million dollars in total . It goes without saying that the bulk of this cake went directly into the mouths of the project’s founders, while if all goes well the crumbs have arrived to the investors and if it goes badly, nothing has arrived.
Forsage has been running a pyramid scheme for over two years, investors could only get a cash reward by bringing new investors into the scheme. The assets introduced by the new investors were then used to repay the former, in the most classic of Ponzi scheme patterns
reads a statement from the SEC.
Carolyn Welshhans, head of the SEC’s Crypto Assets division, added that ” scammers cannot circumvent federal laws on financial products” and there is no point in translating criminal schemes from the world of traditional finance to that of “smart contracts and blockchain”.
The four co-founders of Forsage are all Russian nationals, but the authority has also summoned seven collaborators of the project, all of them resident in the United States of America. Two of the collaborators have already agreed to settle with the SEC, hoping to get a lenient sentence.