The Securities and Exchange Commission has charged 11 people for their roles in a “fraudulent crypto pyramid and Ponzi scheme.”
Forsage had raised more than $300 million from retail investors in an illicit way, the SEC says.
The agency has charged Forsage’s four founders and a series of people with promoting the nine-figure scheme.
According to the SEC’s criminal complaint in 2020, founders based in Russia, the Republic of Georgia, and Indonesia created Forsage, a website that allowed millions of retail investors to transact via smart contracts using the Ethereum, Tron, and Binance blockchains.
Users of Forsage earned returns by recruiting other people to join the alleged scheme, which took place for over two years.
Also, the SEC found that Forsage allegedly used funds from new investors to pay earlier investors, which the SEC said is typical of Ponzi schemes.
According to the SEC, the individuals accused in the case continued promoting the scheme, and denied the allegations, in several YouTube videos.
Forsage’s website claims to have brought in over 2 million participants. It says around 2,500 people have joined Forsage in the past day and that members have been rewarded with over $1.35 billion in value, presumably since the website was launched.