The U.S. Securities and Exchange Commission (SEC) accused the founders and promoters of the cryptocurrency startup Forsage of fraud.
According to U.S. officials, Forsage employees offered customers to create cryptocurrency wallets and buy so-called “slots” that allow them to profit by attracting new investors. Carolyn Welshans, head of the SEC’s Division of Digital Assets and Cybersecurity, called the business model a “fraudulent financial pyramid scheme.”
Fraudsters cannot circumvent federal securities law by using smart contracts and blockchain technology,” Welshans said.
Despite the uncomplicated scheme of work, since January 2020, Forsage has managed to raise over $300 million. Millions of people from around the world, including Russia, have fallen for the swindlers.
The SEC filed a lawsuit in Illinois state court against the four founders of Forsage and seven promoters of the company. Among the firm’s founders were two Russians, Mikhail Sergeyev and Sergey Maslakov, and Vladimir Okhotnikov, who lives in Georgia. In addition to fraud, they are accused of illegal securities trading.