SEC charges 11 people for involvement in Ponzi scheme. These people are related to a website named Forsage. On 1 August, the SEC posted the statement on Twitter.
SEC’s Press Release
The SEC took to Twitter to announce the news on 1 August. In the post, the SEC said they had charged 11 people for illegal activities that raised $300m from retail investors. These people are related to Forsage, a website that allows retail investors “to enter into transactions via smart contracts that operate on the Ethereum, Tron, and Binance blockchains.” Four of the eleven people are founders of Forsage, who live in Russia, The Republic of Georgia, and Indonesia.
Today we charged 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from millions of retail investors worldwide, including in the United States.
— U.S. Securities and Exchange Commission (@SECGov) August 1, 2022
The SEC stated, “Forsage allegedly has operated as a pyramid scheme for more than two years, in which investors earned profits by recruiting others into the scheme. Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.”
Before this, the SEC Philippines and the Montana Commissioner of Securities and Insurance did cease-and-desist actions against Forsage, but they kept denying the allegations and continued with the activities. They even made YouTube videos to deny the accusations.
The Reactions on Forsage and the SEC
One of the things the SEC mentioned in the statement is the involvement of three US-based promoters that make an endorsement for Forsage on their website and social media platforms.
It is a highlight for influencers to be aware of illegal activities. Some accounts on Twitter posted a reminder for anyone who accepts endorsements in this industry. It is a good reminder for the community to look closer before they take the job.