Breaking: SEC Charges 11 In Huge Crypto Pyramid Scheme Worth $300 Million

The U.S. Securities and Exchange Commission had on Monday charged 11 individuals for running a huge global crypto fraud. The accused were involved in creating and promoting a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million. The money was raised from millions of retail investors worldwide, including in the United States, the SEC said.
SEC Crypto Pyramid Scheme Affected Millions Worldwide
Those charged include the four founders of Forsage, the name of the scheme. According to the SEC complaint, the accused had in January 2020 launched Forsage.io, a website that was the center of the fraud. It allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum, Tron, and Binance blockchains.
“Forsage allegedly has operated as a pyramid scheme for more than two years, in which investors earned profits by recruiting others into the scheme. Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.”
This is the second such crypto related fraud that SEC reported its action on. Last month, the commission charged three individuals in the first ever crypto insider trading scheme in the country. It found that a former Coinbase employee allegedly committed fraud by leaking multiple announcements before they were public.
Pyramid Scheme Launched On Massive Scale
Carolyn Welshhans, acting chief of the SEC’s crypto assets and cyber unit, said the SEC got around the scheme despite its focus on smart contracts.
“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors. Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”
The crypto scheme, as per the complaint, operated as a pyramid scheme for over two years. The perpetrators allegedly used assets from new investors to pay earlier investors. The SEC charged the 11 individuals with violating the registration and anti-fraud provisions of the federal securities laws.
- Avalanche Treasury Seals $675M Deal With Mountain Lake to Build $1B AVAX Vehicle
- Just In: Nasdaq-Listed VivoPower Raises $19M in Equity to Expand XRP Treasury Holdings
- Solana Price Rallies 5% as Nasdaq-listed VisionSys Launches $2B SOL Treasury Strategy
- XRP Ledger Rolls Out MPT Standard for Real-World Asset Tokenization
- SEC Puts Crypto ETF Approvals On Hold Following U.S. Government Shutdown
- Cardano Price Forecast As Hashdex Listing Fuels Optimism For $1.27 Breakout
- BONK Price Rally Ahead? Open Interest Jumps as TD Buy Signal Flashes
- Shiba Inu Price to Surge as Whales Buy and Team Commits to Shibarium Growth
- XRP Price Prediction After Ripple CTO David Schwartz Resigns
- SUI Price Eyes $4.5 as Coinbase Futures Listing Sparks Market Optimism
- Chainlink Price Holds $20 Support Amid Tokenization With DTA Standard Progress – Is $47 Next?