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The United States Securities and Exchange Commission (SEC) has charged and arrested individuals involved in a cryptocurrency scam that raised $300 million from investors around the world.
According to a filing filed with the United States District Court on August 1, the SEC alleges that the founders and promoters of the Forsage platform used a “multi-level Ponzi scheme” to raise more than $300 million from hundreds of thousands of users. million retail investors worldwide.
The individuals charged include nationals of Russia, Indonesia and the Republic of Georgia. Several other individuals are also members of a large cryptocurrency advertising group known as Crypto Crusaders.
Forsage claims to be a decentralized smart contract platform that allows investors around the world to participate in trading on the Ethereum, Tron and Binance blockchains. The SEC’s allegations allege that Forsage has operated under a typical Ponzi structure for more than two years, taking advantage of investors to entice and recruit more people to join the organization. the money of the latter is paid to the former.
Carolyn Welshhans, Acting Director of the SEC’s Crypto Assets and Networks Unit said:
“Forsage is a multi-tiered fraud scheme launched on a large scale and aggressively marketed to investors. Scammers cannot circumvent federal securities laws by hiding their plans in smart contracts and blockchain.”
In addition, the SEC also charged three other people with assisting in the promotion of Forsage on social media platforms. However, the committee did not specify who they were.
Forsage was launched in January 2020 and has been “touched” by regulators around the world several times. Forsage’s criminal charges first surfaced in September 2020 by the Philippine Securities and Exchange Commission. By March 2021, the Montana Securities and Insurance Commission also stepped in. Even so, the defendants have continued to promote their projects to this day.
A YouTube channel claiming to be the official Forsage channel has attracted about 6,500 subscribers. In several videos, many people were excited to share how their lives have been improved by Forsage. At the same time, the Forsage website claims the project has attracted more than 2 million participants and claims to have rewarded more than $1.35 billion to customers (presumably since the site’s inception).
Two of the defendants neither admitted nor denied the charges, but agreed to a settlement subject to the court’s decision. Song Forsage declined to provide a method of contacting the company and was not immediately available for comment.
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