Forsage Crypto Dapp Creators Charged by SEC Over Alleged Pyramid Scheme

  • The Securities and Exchange Commission (SEC) is levying charges against Forsage developers and promoters.
  • The SEC says this group was promoting a pyramid scheme.
  • Through Forsage, investors were defrauded out of a total $300 million.
Forsage crypto - Forsage Crypto Dapp Creators Charged by SEC Over Alleged Pyramid Scheme

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A set of crypto criminals have been apprehended by U.S. regulators. The Forsage crypto decentralized application (dApp) is the newest project to be unmasked as a scam, undertaking a pyramid scheme model to defraud investors out of millions. Now, 11 people are being charged, and the Securities and Exchange Commission (SEC) is working to get to the bottom of the crime.

When it comes to crypto, the SEC is taking no prisoners right now. It’s heading the charge toward crypto regulations with a series of lawsuits and investigations that will help set precedent across the U.S. government. Most notable is the lawsuit it filed against Ripple (XRP-USD) in 2020 — a suit that is still ongoing. This suit will help to establish a precedent over whether a cryptocurrency counts in the eyes of the law as an asset or a commodity.

But in the eight months, the body has upped its efforts to regulate crypto and then some. In addition to the Ripple suit, the SEC has opened up a suit against Coinbase (NASDAQ:COIN), also accusing it of performing unregistered security offerings. This comes only days after it worked with the Department of Justice to conduct the first crypto insider trading arrests. Two other probes target Binance (BNB-USD) and Kraken.

If it comes to the ends it hopes for in these cases, the SEC will establish some clear cut metrics for lawmakers. Until Congress can drum up regulations around the crypto space, the SEC is blazing its own trails. It has obviously gotten more bold in its investigations, given its new interest in Binance — the biggest crypto exchange in the world. And today, it takes things to a new level with one of its biggest strings of charges yet.

Forsage Crypto Dapp Faces Pyramid Scheme Charges From the SEC

The newest adversary of the SEC is showing itself today via the Forsage crypto project. Regulators assert that the dApp is covering up a pyramid scheme. And, it’s charging 11 people in connection with the fraud.

Forsage is an Ethereum (ETH-USD) dApp promising big payouts to users. Developers allegedly scammed these users by having them recruit new users into the scheme; the result is a classic pyramid scheme. All-in-all, the project was able to defraud users of over $300 million over the course of two years. Investors from all over the world fell victim to the scheme, including many in the U.S.

The project was hugely successful at defrauding investors. In fact, at its height, the project was one of the most used dApps on the Ethereum chain. Analytics reports even show that Forsage transactions had a tangible effect on Ethereum gas prices.

Yesterday, the SEC took another step into its new crypto enforcer role. The body charged 11 people in connection with Forsage’s fraud scheme. Four of the 11 charged are the founders; these include two developers in Russia, one in Indonesia and one in the Republic of Georgia. Another seven charged in connection with the project are those who promoted Forsage to victims.  The charges come after a pair of cease and desists by the Securities and Exchange Commission of the Philippines and regulators in Montana dating back to 2020.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/forsage-crypto-dapp-creators-charged-by-sec-over-alleged-pyramid-scheme/.

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