Cryptocurrency scam busted by US securities agency | Cryptocurrencies


US authorities have busted a massive cryptocurrency pyramid scheme, indicting 11 people for their role in defrauding retail investors of more than $300 million worldwide.

The US Securities and Exchange Commission (SEC) announced the charges on Monday, which relate to a Ponzi scheme called Forsage that has been in operation for more than two years. The agency charged the alleged founders of the pyramid scheme, as well as several organizers.

Forsage’s website launched in January 2020, the SEC said, and allowed millions of retail investors to transact through smart contracts that run on the Ethereum, Tron and Binance blockchains. Investors made profits by recruiting others into the scheme, the SEC said.

Forsage also allegedly used assets from new investors to pay previous investors in a typical Ponzi structure, the SEC complaint added.

“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 ​​Division. “Fraudsters cannot circumvent federal securities laws by focusing their schemes on smart contracts and blockchains.”

The four founders of Forsage were last known to live in Russia, the Republic of Georgia and Indonesia, the SEC statement said.

Without admitting or denying the allegations, two of the defendants agreed to settle the charges and one of them agreed to pay penalties, the SEC said.

The 11 accused could not be reached for comment.

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