The SEC has filed charges against 11 people involved in an international "crypto pyramid and Ponzi scheme" that raised more than $300 million from millions of investors.
The SEC action was aimed at a site called Forsage, which allowed retail investors to make transactions through smart contracts on Ethereum, Tron and Binance's BNB Chain, the agency said Monday.
The site “operated as a pyramid scheme in which investors earned profits by recruiting others into the scheme” and “allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure,” the SEC said.
The scheme operated “on a massive scale and aggressively marketed to investors," Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit, said in a statement.
The SEC said Forsage had ignored “cease-and-desist actions” issued by the Securities and Exchange Commission of the Philippines and by the Montana commissioner of securities and insurance while continuing to promote the scheme and “denying the claims in several YouTube videos and by other means.”
The SEC filed charges against Forsage’s four founders — Vladimir Okhotnikov; Jane Doe, also known as Lola Ferrari; Mikhail Sergeev; and Sergey Maslakov — who were last known to be living in Russia, the republic of Georgia and Indonesia.
The regulator also filed charges against three U.S.-based individuals who helped promote the site and members of a group called Crypto Crusaders, which promoted the scheme in the U.S. from at least five states.
The move is one of the first major legal actions of the SEC’s newly renamed Crypto Assets and Cyber Unit, which recently expanded to focus more closely on crypto-related cases.
Climate TRACE's data show emissions at the facility-level.Image: Climate TRACE