The United States Securities and Exchange Commission charged the founders and promoters of the alleged fraudulent pyramid scheme operated by Forsage, following an investigation conducted with the assistance of the local SEC.
The US SEC said in a statement it charged 11 individuals for their roles in creating and promoting Forsage, which allegedly raised more than $300 million from millions of retail investors worldwide, including the Philippines.
The Philippine SEC said it provided assistance to its US counterpart in the conduct of the investigation of the fraudulent investment-taking activities of Forsage by sharing information in the course of its own investigation.
It said it issued a cease-and-desist order against Forsage in September 2020 for its alleged illegal solicitation of investments through a crowdfunding platform, supposedly based on the Ethereum blockchain technology.
The US SEC also charged the four founders of Forsage and three US-based promoters found to be endorsing the investment scam on its website and social media platforms and members of Forsage’s promotional group called Crypto-Crusaders—the largest promotional group for the scheme that operated in the United States from at least five different states.
The founders Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev and Sergey Maslakov, launched Forsage.io in January 2020. The website allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum, Tron and Binance blockchains.
The US SEC said Forsage allegedly operated as a pyramid scheme, where investors earned profits by recruiting others, for more than two years. Forsage also used assets from new investors to pay earlier investors in a typical Ponzi structure, it said.
“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 Aquino said.
“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.