U.S. regulators are seizing their moment during this ongoing crypto bear market to crack down on bad actors in the space as many investors are already souring on the asset class.
The U.S. Securities and Exchange Commission charged 11 people today in connection with Forsage, a crypto project that raised over $300 million from “millions of retail investors worldwide,” the agency announced today. The individuals charged include the project’s four founders — Vladimir Okhotnikov, Jane Doe aka Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov — who were last sighted in Russia, Georgia and Indonesia. Several members of the “Crypto Crusaders,” a group that promoted the scheme in at least five different U.S. states were also charged, according to the announcement.
Forsage was launched in January 2020 as a website that allowed retail investors to transact on the Ethereum, Tron and Binance blockchains, the SEC complaint says. In June 2020, Forsage was the most popular decentralized application on Ethereum and consumed so much bandwidth on the chain that it caused gas fees to spike. At the peak of its popularity in July 2020, over $20 million worth of ETH was sent to the platform in a single day, Dune Analytics data shows.
According to the SEC, the project has operated as a pyramid scheme for more than two years and used assets from new investors to pay off old ones, typical of a Ponzi scheme structure. Operating a pyramid scheme, a fundamentally unsustainable business model wherein…
