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SEC Accuses Well-known Ethereum DApp Of Being A Ponzi Scheme

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At least 11 people were formally charged by the United States Securities and Exchange Commission (SEC) of participating in a Ponzi scheme based on cryptocurrencies such as ether (ETH), with which they earned approximately $300 million from investors who , who had fallen. alleged scam.

According to the indictment available on the SEC’s website, the alleged Ponzi scheme goes by the name of Forsage. It is presented as a platform that works on a smart contract, Allows millions of people to transact on Ethereum, Tron and BNB chains, We have already talked about this service at Cryptonoticious.

As they explain, “the total amount of these transactions is over US$300 million”, noting that the people who created the scam have “through aggressive propaganda on the Internet for Forsage and its Smart contracts are maintained.”

The US SEC determined that the project members Raised funds from retail investors in the United States and around the worldThrough unregistered offering and sale of securities.

It added that “they were involved in a scheme to defraud investors and also in practices that operated as fraud or deceit for them.”

The SEC claims that Forces is never sold or sold in order to sell any actual consumable product to retail customers. “for a relevant period”. Further, “(Force) had no clear source of income other than money received from investors.”

The regulator explained that the way investors make money from Forsage is by recruiting others to participate in the scheme. They have to create a wallet and buy “slots” or space within smart contracts with it. These places give him rewards from the people who were referred, as well as from other large investors on the platform. This, “as a way of participating in the benefits of the payment,” says the SEC.

They use blockchain to transfer money

Something that the SEC highlights is that, through the aforementioned blockchain, Operators directed to add more investor’s funds.

The founders designed and controlled all of Forsage’s essential functions, including the creation of smart contracts, compensation planning, development of the Forsage website, ‘back office’ infrastructure, company promotion, collection and distribution of payments to investors. design and launch new investment platforms, and manufacture and maintain training and support equipment.

United States Securities and Exchange Commission.

Not compliant, the SEC continues, the creators encrypted one of Forge’s smart contracts on the Ethereum blockchain “to convert a portion of investor funds into a cryptocurrency wallet associated with any participant.”

According to the SEC, the Forces defended themselves when they were accused of operating as a pyramid scheme. Both the founders, promoters and financiers denied the allegations. and assured that it was a valid operation.

At least four of the 11 convicted by the SEC, who are founders of the scheme, are on an unknown fate. is considered Living in Russia, Republic of Georgia or IndonesiaAmerican press picks up.

Forsage originated in 2020, the year of the COVID-19 pandemic, and since then, various regulators have tried to stop it. In fact, as reported by Cryptonoticius, what is known to be the largest Ethereum DApp, was pointed out by the Philippine SEC as a possible Ponzi scheme.

Kryptonoticius tried to communicate with spokespersons for Forces, but it was not possible until this report closed. Nor has he published anything about it on his website or on his Twitter account. However, despite further charges, the service is still up and running.



Read More: SEC Accuses Well-known Ethereum DApp Of Being A Ponzi Scheme

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