The United States financial policeman accuses 11 people of having set up a huge cryptocurrency scam. Baptized Forsage, the project is based on a completely classic Ponzi pyramid. With this system, they have raised 300 million dollars from thousands of investors around the world.
The Securities and Exchange Commission (SEC), the federal authority in charge of controlling the American financial markets, has justindict 11 people accused of setting up a vast cryptocurrency scam.
In a press release published this Monday, August 1, 2022, the federal body points to a crypto platform titled Drilling. Launched in January 2020, the Forsage.io website allows investors to “ perform transactions through smart contracts running on Ethereum blockchains”. Trading via the Tron networks and the Binance Smart Chain is also offered.
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Ponzi schemes and aggressive social media ads
According to the SEC investigation, Forsage relies on a Ponzi scheme. In a pyramid scheme, investors make money by bringing in new members. The oldest members are remunerated thanks to the assets deposited by new investors. As the SEC explains, Forsage has “ used the assets of new investors to pay previous investors”.
” Forsage is a fraudulent pyramid scheme launched at scale and aggressively marketed to investors”says Carolyn Welshhans, acting head of the SEC’s crypto unit.
On its website, Forsage indeed claims entrance fees Internet users who wish to join the community. The cost ranges from 10 euros to approximately 75 dollars in Ether. Once the investor has paid the entry fee, he will be able to reap profits by attracting other users. To join the site, the Internet user must imperatively go through a referral link.
” You receive a reward as soon as a new partner has joined your team. To do this, you need to invite new partners and grow your team. Use your referral link for this »details the Forsage support service, pointing out that the income received ” depend on the individual efforts and performance of your team”.
The helpdesk states that it is impossible to lose money with Forsage, because profits do not depend on the price of cryptocurrencies. The growth of the platform is therefore based solely on the assets injected by new entrants. This is the essence of a Ponzi scheme.
To promote the website, the administrators have published numerous advertisements on social networks. Still, most platforms have taken steps to stem the influx of ads promoting cryptocurrency. This is particularly the case of TikTok, which banned ads of this type in July 2021, and Twitter, which tightened the screw in 2018.
For its part, Facebook has long banned ads related to cryptocurrencies. Despite everything, the social network continued to swarm with ads evoking digital assets in half-words. Note that the ban was eventually lifted last year. From now on, advertisements dedicated to crypto services are authorized on Facebook.
The four founders charged
Through aggressive promotional campaigns, Forsage was able to raise over $300 million. Millions of retail investors around the world, including in the United States, have trusted the platform, the SEC said. The team clarifies, however, that Forsage ” never holds the money of any of its participants”. The injected funds are managed in a decentralized way by smart contracts deployed on the blockchains.
” As the system is decentralized, no one controls your winnings. You are responsible for it yourself and only you can decide how fast you want to win”details the assistance service.
The American financial watchdog announces that it has indicted the four founders of Forsage, namely Vladimir Okhotnikov, Jane Doe alias Lola Ferrari, Mikhail Sergeev and Sergey Maslakov. For the moment, the authorities do not know where these individuals are. According to the SEC, the founders reside in Russia, Georgia and Indonesia.
The American authority is also indicting several promoters of Forsage, including three people who live in the United States. Two of the promoters agreed to settle the charges. Contacted by us, the Forsage team denies rely on a pyramid system.
” We are a decentralized system that does not obey any regulator on this planet”vigorously declares a member of the team, believing that the complaint of the SEC is ” great free publicity for Forsage”.
We also asked the team about how Forsage executives generate revenue. According to the audience, administrators earn money the same way as all members… by recruiting other users.