The U.S. Securities and Exchange Commission (SEC) has indicted four founders and seven promoters of Forsage, which it described as a “fraudulent crypto pyramid and ponzi scheme.” The scheme allegedly raised more than $300 million from millions of private investors around the world, including in the U.S.
SEC Takes Action Against Forsage Crypto Scheme
The U.S. Securities and Exchange Commission (SEC) announced Monday that it has charged 11 individuals “for their roles in the creation and promotion of Forsage, a fraudulent crypto pyramid and ponzi scheme.” Securities regulatorsexplained that the Forsage scheme raised more than $300 million from millions of individual investors around the world, including in the United States
The 11 defendants are four Forsage founders, three U.S.-based promoters of the scheme, and “several members of the so-called Crypto Crusaders, the largest promotional group for the scheme that operated in the United States,” the SEC explained. The founders were last identified as living in Russia, the Republic of Georgia, and Indonesia.
The Securities Surveillance Commission has found that Vladimir Okhotnikov, Jane Doe (a.k.a. Lola Ferrari), Mikhail Sergeev, and Sergey Maslakov were the founders of the cryptocurrencies that private investors have been trading on the Ethereum, Tron, and Binance blockchain for They detailed the launch of the Forsage.io site in January 2020 to allow private investors to initiate transactions via smart contracts.
However, Forsage investors profited by recruiting others into the scheme, the SEC said, and “Forsage also allegedly used assets from new investors to pay previous investors in a typical ponzi structure.” He noted.
Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit, commented:
As alleged in the Complaint, Forsage is a fraudulent pyramid scheme that was launched on a large scale and aggressively marketed to investors.
Some regulators are trying to stop Forsage from operating in their jurisdictions. The Securities and Exchange Commission of the Philippines initiated a cease-and-desist action against Forsage in September 2020, and the Montana Securities and Insurance Commission took action against the scheme in March 2021. However, Forsage denied the allegations in a Youtube video and continued its business.
The SEC charged the defendants with “violating the registration and anti-counterfeiting provisions of the federal securities laws,” the SEC noted, adding that regulators “seek injunctive relief, disgorgement, and civil penalties.”
Two of the indicted promoters have already agreed to settle, without admitting or denying the allegations. They will be required to pay disgorgement and civil penalties. Both settlements require court approval.
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