A fraudulent crypto pyramid and Ponzi scheme that garnered over $300 million (approximately Rs. 2,500 crore) from retail investors worldwide, including in the United States, was created and promoted by 11 people, according to the Securities and Exchange Commission, which announced the charges on Monday. The four Forsage scheme founders were among those accused. The SEC said in a statement that they were last identified as having addresses in Indonesia, the Republic of Georgia, and Russia.
It was impossible to get in touch with the accused people right away for remark. The website for the plan reportedly went live in January 2020 and allowed millions of individual investors to transact using smart contracts. According to the SEC, it allegedly ran as a pyramid scheme for more than two years during which time investors made money by enlisting new participants. According to the SEC complaint, Forsage also allegedly used assets from new investors to pay off prior investors in a conventional Ponzi scheme.
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According to Carolyn Welshhans, interim chief of the SEC’s Crypto Assets and Cyber branch, “Forsage is a fraudulent pyramid scheme that was established on a large scale and aggressively pushed to investors.” “Fraudsters cannot get around federal securities rules by concentrating their schemes on blockchains and smart contracts.” According to the SEC, two of the defendants settled the charges without admitting or rejecting the claims, and one of them agreed to pay fines.
When the ED detained a suspect in connection with its money laundering investigation against a Kerala-based businessman who is alleged to have defrauded more than 900 investors out of Rs. 1,200 crore in exchange for providing them with cryptocurrency, a cryptocurrency Ponzi scheme was busted in India in March. On March 24, Abdul Gafoor, one of the top stockists of the “Morris Coin cryptocurrency,” was arrested. The following day, he was brought before a judge and placed in the Enforcement Directorate’s (ED) detention until March 31.