(Kitco News) The U.S. Securities and Exchange Commission (SEC) has charged 11 people with creating and promoting a crypto pyramid and Ponzi scheme that raised more than $300 million from investors around the world .
Those charged were the four founders from Russia, the Republic of Georgia and Indonesia, three US-based promoters and several other members of the Crypto Crusaders promotional group which operated in the United States, the SEC said in a statement. .
The crypto system was launched in January 2020 under the name Forsage. It was a website that “enabled millions of retail investors to transact via smart contracts that ran on Ethereum, Tron, and Binance blockchains,” the SEC said.
Forsage allegedly operated as a pyramid scheme for over two years. Existing investors could make a profit by recruiting more people into the plot. “Forsage allegedly used assets of new investors to pay previous investors in a typical Ponzi scheme,” the SEC said.
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Two defendants agreed to settle the charges without admitting or denying the allegations. And one of them agreed to pay all the penalties, according to the SEC.
“Forsage is a fraudulent pyramid scheme launched at scale and aggressively marketed to investors,” said Carolyn Welshhans, acting head of the SEC’s Crypto Assets and Cyber Unit. “Fraudsters cannot circumvent federal securities laws by focusing their schemes on smart contracts and blockchains.”
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