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SEC charged about 11 people for involvement in the alleged pyramid scheme.
On Monday, the United States Securities and Exchange Commission went on to charge 11 people alleging them for their roles in a crypto pyramid scheme. As per the commission, these people allegedly had their part in creation and promotion of the fraud scheme. The crypto ponzi scheme is said to raise over 300 million USD worth funds from victims.
According to the reports, the scheme was named Forsage. It was promoted as a decentralized smart contract platform. The so-called platform claimed that they helped millions of small investors to make their transactions using smart contracts across Ethereum, Tron and Binance like blockchain. However, the SEC allegations on the scheme tell a different story.
SEC accuses that Forsage acted like the pyramid schemes generally do. As per the agency, it continued for over two years. The investors in the scheme were claimed to earn profits after they employed others for their operation.
The SEC filed a formal complaint against Forsage where it called it a Ponzi scheme. The report explained that the scheme heavily promoted its smart contracts across different spaces using online promotions and new platforms for investments. However, the company was not into selling any actual or viable product.
The reason why the commission called it a pyramid scheme is because of its way to generate revenue. The only way Forsage investors could raise money was to make others join the scheme. The SEC admitted in a statement where they claimed that the company operated and paid earlier employees using assets generated from new investors.
Financial watchdog has filed charges against 11 people in this case. Out of this, four are founders of the alleged pyramid scheme. They were earlier belonging to Russia, Indonesia and Georgia, but their current residents are yet not known. Additionally, three people involved in the promotion of Forsage were also charged. These US based promoters were endorsing the company using their social media platforms.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
