{"id":480242,"date":"2022-08-02T05:27:26","date_gmt":"2022-08-02T02:27:26","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/sec-charges-11-individuals-over-300m-crypto-pyramid-scheme\/"},"modified":"2022-08-02T05:27:26","modified_gmt":"2022-08-02T02:27:26","slug":"sec-charges-11-individuals-over-300m-crypto-pyramid-scheme","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/sec-charges-11-individuals-over-300m-crypto-pyramid-scheme\/","title":{"rendered":"# SEC charges 11 individuals over $300M crypto \u2018pyramid scheme\u2019"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a25721dd44ff\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a25721dd44ff\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/sec-charges-11-individuals-over-300m-crypto-pyramid-scheme\/#%E2%80%9D_SEC_charges_11_individuals_over_300M_crypto_%E2%80%98pyramid_scheme_%E2%80%9C\" >&#8221; SEC charges 11 individuals over $300M crypto \u2018pyramid scheme\u2019 &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_SEC_charges_11_individuals_over_300M_crypto_%E2%80%98pyramid_scheme_%E2%80%9C\"><\/span>&#8221; SEC charges 11 individuals over $300M crypto \u2018pyramid scheme\u2019 &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDgvMWE0YmJhZWMtN2VlMy00MDk3LTk0MGYtMzViYzVlOWVjOTkyLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-28d77a7a>The Securities and Exchange Commission (SEC) has charged 11 individuals for their alleged role in the creation of a &#8220;fraudulent crypto pyramid scheme&#8221; platform Forsage.\u00a0<\/p>\n<p>The charges were laid in a United States District Court in Illinois on August 1, with the SEC alleging that the founders and promoters of the platform used the \u201cfraudulent crypto pyramid and Ponzi scheme\u201d to raise more than $300 million from \u201cmillions of retail investors worldwide.\u201d<\/p>\n<p>The <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/news\/press-release\/2022-134\">SEC<\/a> complaint states that Forsage was modeled such that investors would be financially rewarded by recruiting new investors to the platform in a &#8220;typical Ponzi structure,&#8221; which spanned multiple countries including the United States and Russia.\u00a0<\/p>\n<p>According to the SEC, a Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. These schemes often solicit new investors by promising to invest funds in opportunities that generate high returns for little risk.\u00a0<\/p>\n<p>In the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/litigation\/complaints\/2022\/comp-pr2022-134.pdf\">court<\/a> document, the SEC stated that: <\/p>\n<blockquote><p>\u201cIt [the Forsage platform] did not sell or purport to sell any actual, consumable product to bona fide retail customers during the relevant time period and had no <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>arent source of revenue other than funds received from investors. The primary way for investors to make money from Forsage was to recruit others into the scheme.\u201d<\/p><\/blockquote>\n<p>According to the SEC, Forsage\u2019s alleged Ponzi scheme works by firstly enabling new investors to set up a crypto-asset wallet and purchase \u201cslots\u201d from Forsage\u2019s smart contracts. <\/p>\n<p>Those slots would give them the right to earn compensation from others whom they recruited into the scheme, referred to as \u201cdownlines\u201d, and also from the community of Forsage investors in the form of profit sharing, referred to as \u201cspillovers\u201d.<\/p>\n<p>Carolyn Welshhans, Acting Chief of the SEC\u2019s Crypto Assets and Cyber Unit called Forsage a\u00a0\u201cfraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors.&#8221;<\/p>\n<p>She also added that decentralized technologies cannot act as an escape route for illegal conduct: <\/p>\n<blockquote><p>&#8220;Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.&#8221;<\/p><\/blockquote>\n<p>In addition to the four founders, who include Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov, the SEC\u2019s complaint also included seven promoters, three of which were in a U.S.-based promotional group called the \u201cCrypto Crusaders\u201d.<\/p>\n<p>All 11 individuals have been charged with violating \u201cUnregistered Offers and Sales of Securities\u201d under Section 5 A &amp; C and \u201cFraud\u201d under Section 17(a) (1 &amp; 3) of the US Securities Act. The defendants have also been charged with \u201cFraud\u201d under Section 10 B-C of the US Exchange Act.<\/p>\n<p>These efforts enabled the Ponzi structure to capture the massive scale that it achieved from retail investors buying into the model over the last two years, said Welshhans.<\/p>\n<p><strong><em>Related: How to identify and avoid a crypto pump-and-dump scheme?<\/em><\/strong><\/p>\n<p>In September 2020, Forsage was subject to cease-and-desist orders from the Philippines SEC. In March 2021, the platform also received cease and desist orders from the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/csimt.gov\/news\/commissioner-downing-orders-forsage-to-cease-and-desist\/\">Montana<\/a> Commissioner of Securities and Insurance.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.youtube.com\/c\/FORSAGECommunity\/videos\">Forsage\u2019s <\/a><a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">YouTube<\/a> channel shows that their platform was promoted as little as ten days ago. The platform\u2019s Twitter account also appears active. <\/p>\n<p>Cointelegraph reached out to Forsage to provide a comment on the matter but did not receive an immediate response.\u00a0<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/sec-charges-11-individuals-over-300m-crypto-pyramid-scheme\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; SEC charges 11 individuals over $300M crypto \u2018pyramid scheme\u2019 &#8220; The Securities and Exchange Commission (SEC) has charged 11 individuals for their alleged role in the creation of a &#8220;fraudulent crypto pyramid scheme&#8221; platform Forsage.\u00a0 The charges were laid in a United States District Court in Illinois on August 1, with the SEC alleging&#8230;<\/p>\n","protected":false},"author":1,"featured_media":480243,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDgvMWE0YmJhZWMtN2VlMy00MDk3LTk0MGYtMzViYzVlOWVjOTkyLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74867,75321,74898,71006,70934],"class_list":["post-480242","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-altcoin","tag-ponzi-scheme","tag-sec","tag-fraud","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480242","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=480242"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/480242\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/480243"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=480242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=480242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=480242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}