Forsage created a $340 million DeFi financial pyramid
The founders of this project have been charged with fraud by a jury in Oregon.
The US Department of Justice (DOJ) claims that Forsage deliberately used smart contracts coded in this way to create a pyramid scheme. Its four Russian founders have been formally charged for their willful role in a scam that raised around $340 million from investors around the world. The project advertised itself as a low-risk, decentralized financial platform that allows users to generate passive income over the long term.
Forsage created a $340 million DeFi pyramid
The US Department of Justice recently issued a statement in which it informed that the founders of one of the DeFi investment platforms popular among investors were accused of a multi-million dollar fraud. In the opinion of the US government department, Forsage was a financial pyramid based on smart contracts.
The project mentioned above was presented as an investment tool based on the Ethereum blockchain platform that allows users to earn passive profits in the long term with extremely low risk.
"Bringing effective charges against foreign entities that have used new technologies in finance to commit fraud in the emerging financial market is a complex undertaking possible only with the full coordination of many law enforcement agencies, primarily in the United States," emphasized Oregon District Attorney Natalie Wight.
The formal accusation mentioned above concerns four people who are Russian citizens, namely Vladimir Okhotnikov, Sergey Maslakov, Olena Obłamskaya and Mikhail Sergeyev. According to the allegations against them, they played a key role in the program, which raised about 340 million dollars from its victims. According to available reports, despite the promised passive returns on investment, as many as about 80% of investors entrusting their funds to the Forsage platform received a smaller amount back than they had previously invested.
Large-scale fraud
According to information provided by the US Department of Justice, the capital raised from new Forsage members buying "slots" was used to pay out funds to earlier investors. In this way, a typical financial pyramid was created, functioning under the guise of new technologies in the world of finance.
Despite the accusations against the founders of the platform, it remains active in its social media. For example, yesterday, an entry was added to the Twitter account, which informed that members of its elite group of "Ambassadors" will be able to earn rewards for completing certain tasks over the next month.
In addition to US authorities, the Securities and Exchange Commission of the Philippines warned against Forsage in parallel. This entity assessed that the aforementioned project may be a financial pyramid already at the stage of 2020. Despite this, the platform continued to enjoy considerable popularity among DeFi investors.
