Why does the SEC issue advice warning the public about unregistered companies? First, any company that plans to receive money from the public in exchange for securities — or a monetary value financial contract — must be registered under Republic Act No. 8799 or the Securities Regulatory Code. Millions of users around the world were recruited by a network of promoters, including a group called the “Crypto Crusaders” to send money via smart contracts on the Ethereum, Tron and Binance blockchains in exchange for payment when they recruited another investor, the SEC said — a business model the agency described as a “pyramid of textbooks and a Ponzi scheme.” It is alleged that Forsage operated an illegal Ponzi scheme for more than two years to raise funds from new customers and pay existing investors. For the uninitiated, Ponzi schemes are business models that rely on recruiting members to pay an upfront fee, with the amount going up the chain. To encourage new hires to attract more people to the program, they have implemented elaborate reward programs to recruit employees. The Securities Regulatory Code exists to legally protect everyone from unscrupulous individuals who want to make their way into your portfolio. If a company does not comply with SEC rules, the risk increases exponentially and it is very likely that it is a fraudulent business that exists only to take your money. Meanwhile, the website (forsage.io) was only registered on February 9, 2020. Finally, the SEC will only issue registration certificates to companies that have a clear financial plan and are transparent about how they conduct business and make money for their investors. Although the company claims that it is not a Ponzi scheme, the company`s recruitment and payment patterns clearly indicate a pyramid structure. Forsage`s four founders were known to have lived in Russia, the Republic of Georgia and Indonesia, the SEC said in its statement. The SEC investigation was led by Liz Canizares and Pamela Sawhney of the Crypto Assets and Cyber Unit and overseen by Amy Friedman and Ms.
Welshhans. The litigation is led by Patrick Costello, Christopher Carney, Ms. Canizares and Ms. Sawhney and is handled by Olivia Choe. The Commission appreciates the support of the Securities and Exchange Commission of the Philippines and the Montana Commissioner of Securities and Insurance. According to the SEC complaint, Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev and Sergey Maslakov launched Forsage.io in January 2020, a website that allowed millions of retail investors to transact via smart contracts powered on the Ethereum, Tron, and Binance blockchains. However, Forsage has reportedly operated as a Ponzi scheme for more than two years, where investors have made profits by recruiting other people into the scheme. Forsage would also have used new investors` assets to pay previous investors under a typical Ponzi scheme. Read more: Eliminate the Soviet-era Ponzi scheme that eats Ethereum The U.S. Securities and Exchange Commission on Monday indicted 11 people linked to the alleged $300 million Forsage crypto Ponzi scheme.
US authorities have blown up a giant cryptocurrency pyramid scheme, indicting 11 people for their role in defrauding retail investors of more than $300 million worldwide. GlobalData is the parent company of Verdict and its sister publications. Although generally linked, multi-level marketing (MLM) systems are accused of being pyramid schemes. Since last year, the SEC has required crowdfunding platforms to register with the government. According to the memorandum released last year, companies soliciting money from Filipinos must be registered with the SEC before they can make investments and issue securities that serve as proof of investments by individuals. Investors received compensation by recruiting others for the alleged Ponzi scheme. They also received compensation from the wider investment community in the form of profit-sharing payments or “ripple effects”. The more people hired investors for Forsage, the more they were told they could get money.
On August 1, 2022, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit alleging that Forsage was a fraudulent crypto scheme. (Read: The best investments in times of crisis) SEE ALSO: Indian crypto investors deceived by fake Rs 1,000 crore exchanges: CloudSEK Forsage was one of the most popular Ethereum (ETH) decentralized blockchain applications. According to Dune Data Analytics, $20 million worth of ETH tokens were sent to Forsage in a single day in July 2020. Reports suggest that a certain Lado Okhotnikov is the owner of Forsage. According to behindmlm.com, Okhotnikov is a Russian who could currently be stationed in Tbilisi, Georgia. Companies, including their representatives, that fail to comply with SEC guidelines face fines of up to 5 million pesos and prison terms of up to 21 years. Forsage allegedly deceived retail investors about $300 million with aggressive marketing tactics promoted through social media platforms. Ellis and Thiessen have already reached settlements with the SEC that include forfeiture and civil penalties. Forsage did not offer any identifiable products or services.
To earn commissions, you need to recruit people for your network and a certain percentage of their payment will be returned to you. According to its website, Forsage is a “next-generation international crowdfunding platform and the first smart contract with the commercialization of the `Matrix` type on the Ethereum cryptocurrency blockchain.” The Securities and Exchange Commission of the Philippines issued an injunction against Forsage in September 2020. Six months later, Montana`s commissioner of securities and insurance followed suit, but Forsage`s promoters continued to promote the so-called system anyway. Members of the Crypto Crusaders created infographics that reportedly explained “Why Forsage is absolutely not a pyramid scheme!!” and posted them on various social media platforms. The defendants were named Cheri Beth Bowen, Ronald R. Deering, Samuel D. Ellis, Mark F. Hamlin, Carlos L. Martinez, Alisha R.
Shepperd and Sarah L. Theissen. However, the defendants allegedly continued to promote the programme and denied any wrongdoing through various communication channels, including YouTube videos.