- The Department of Justice claims Forsage’s older supporters get funding from new investors.
- The authorities claims that Forsage operated using a Ponzi scheme based on smart contracts.
U.S. Department of Justice (DOJ) confirms in a statement that four Forsage founders have been indicted on charges totaling more than $340 million. The authorities claim that Forsage operated using a Ponzi scheme–like system based on smart contracts.
Indictments are handed out by grand juries. If prosecutors are able to convince the majority of the jurors. If there is sufficient evidence to support an official allegation, the evidence will be made public. On the other hand, a charge is when the prosecutor brings criminal accusations against someone for breaking the law.
Typical Ponzi Scam
Moreover, there are four Russian nationals among the founders and principal defendants. They go by the names of Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov. Each of the four has been formally accused of major wrongdoing in the $340 million investment scam.
Forsage promoted itself as an ETH-based decentralized financial platform. Moreover, the firm supposedly enabled its consumers to generate sustainable streams of passive revenue. Blockchain investigation, however, purportedly revealed that 80% of Forsage “investors” got back less money than they had invested.
The Department of Justice (DOJ) claims that Forsage’s older supporters get funding from new investors who purchase “slots” in the company’s smart contracts. Just like this is how a Ponzi scam works.
In addition, the Securities and Exchange Commission (SEC) filed charges of fraud and the sale of unregistered securities against the company’s four original founders and seven original promoters in August 2022. SEC Head of Crypto Assets and Cyber Section Carolyn Welshhans said that “fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”
