Good job!  SeC scores victory after US regulators file charges vs Forsage for $300M crypto pyramid scheme

The Securities and Exchange Commission has lauded the move of its US counterpart to charge 11 individuals for allegedly swindling investors worldwide, including the Philippines, of more than $300 million in a crypto pyramid scheme.

The US SEC filed charges of fraud and unregistered offer and sale of securities against the four international founders of Forsage, as well as three US-based promoters of the scheme and several other members of the group’s promotional group called Crypto-Crusaders.

“We at the SEC Philippines commend the US SEC for bringing down an investment scam of this scale and proportion, stopping it from further victimizing helpless individuals across the globe,” SEC chairman Emilio B. Aquino said.

The SEC Philippines provided assistance to the US SEC in the conduct of the investigation of the fraudulent investment-taking activities of Forsage by sharing information gathered by its team in the course of its own investigation.

“The SEC Philippines is always ready to collaborate with its counterparts in other jurisdictions, as well as other regulators, to stamp out investment scams in other parts of the world. We remain committed to promoting the rights and welfare of investors, as we work toward the common goal of protecting the investing public,” Aquino said.

Forsage was founded in January 2020 by Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov. It started as a “website that allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum and Binance blockchains.”

However, Forsage turned out to be an operator of a Ponzi scheme where investors earned profits by recruiting others for more than two years.

Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi setup.

SEC Philippines issued on September 27, 2020 a cease and desist order (CDO) against Forsage for its illegal solicitation of investments through a crowdfunding platform, supposedly based on the Ethereum blockchain technology.

The CDO noted that Forsage was not registered as a corporation or partnership with the SEC Philippines, and that it was likewise not qualified to operate as a crowdfunding entity in the Philippines.

The SEC further found that Forsage was not registered with the Bangko Sentral ng Pilipinas, which requires all entities engaged in virtual currencies in the country to register as a remittance and transfer company.

In addition to the CDO, the SEC Philippines issued an advisory as early as June 30, 2020, advising the public to stop investing in any scheme offered by Forsage and other similar entities touting investment opportunities in cryptocurrencies and other digital assets not registered with the Commission.

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