Part of the Securities and Exchange Commission’s (SEC) crackdown on questionable crypto firms, the regulatory body recently charged 11 individuals for their roles in creating and promoting a crypto pyramid scheme that raised around US$300 million from its investors.
But the company in litigation, decentralized networking platform Forsage, seems it doesn’t mind the legal kerfuffle. The Twitter account claiming to be the firm’s official one still posted about the platform’s weekly update, saying it was “another excellent week for [the] community.”
Days before the regulatory body announced the fraud charges, the account tweeted about how the business model is a “simple perfection,” touting to be delivering “extraordinary solutions every time thanks to the power of the key elements that others forget about.”
“They say, there is no limit to perfection, and #Forsage continues to prove it by making history with every launch. The time is coming soon. Buckle up..,” the account added.
The SEC charged the four founders of Forsage who were last known to be living in Russia, the Republic of Georgia, and Indonesia: Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov. The company operates through smart contracts that operated on the Ethereum, Tron, and Binance blockchains.
The agency found out in its investigation that the firm’s operations include allowing investors to earn profits from recruiting other users. The company is also allegedly using assets “from new investors to pay earlier investors in a typical Ponzi structure.”
“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 federal securities laws by focusing their schemes on smart contracts and blockchains.”
Despite cease and desist orders from the agency’s counterparts in the Philippines back in September 2020 and in the state of Montana back in March 2021, Forsage still continued to promote the alleged scheme despite these regulatory bodies deeming the operation as fraud.
Aside from the four founders, three US-based promoters and four members of so-called promotional group Crypto Crusaders who promoted Forsage on their respective platforms were also charged by the SEC. The agency said that two of the charged promoters agreed to settle the charges.
It seems like this tweet didn’t age well.
Information for this briefing was found via Securities and Exchange Commission and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.