U.S. SEC Charges 11 Founders, Promoters of Crypto Ponzi Scheme

Daniel Attoe
Daniel Attoe

Updated · Aug 02, 2022

SHARE:

Techjury is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more.

The commission, on Monday, alleged that the scheme’s operators cheated investors globally out of $300 million.

Pyramid Scheme

The U.S. Securities and Exchange Commission (SEC) has charged eleven members of a “fraudulent crypto pyramid” scheme. They allegedly scammed investors of more than $300 million. 

The group consists of four founders and seven promoters of Forsage. The company launched in 2020 to allow retail investors to enter into transactions via smart contracts on various blockchains

However, the real scheme involved providing a means for users to earn by recruiting others. In a typical Ponzi scheme structure, Forsage paid them from money made from earlier investors. A dedicated network of promoters resulted in millions of users recruited from around the world, including people in the United States.

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit. “Fraudsters cannot circumvent the securities laws by focusing their schemes on smart contracts and blockchains.”

Two of the defendants agreed to settle the charges without admitting or denying the SEC’s allegations. One of those agreed to pay disgorgement and civil penalties. Both of these settlements are subject to approval from a court.

Sources.

SHARE:

Daniel Attoe

Daniel Attoe

Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.

Leave your comment

Your email address will not be published.