SEC Charges 11 for $300M in Crypto Ponzi Scheme

investopedia.com:

The United States Securities and Exchange Commission (SEC) has charged 11 individuals for creating and promoting a fraudulent crypto pyramid scheme and Ponzi scheme. The authority published a press release on August 1, saying that the $300 million crypto pyramid scheme involved perpetrators from several countries. The complaint was filed in the United States District Court in the Northern District of Illinois.

The pyramid scheme in question is Forsage, and its four founders have been known to be in Russia, the Republic of Georgia, and Indonesia. Three individuals in the U.S. have also been accused of promoting Forsage, as well as a group called Crypto Crusaders, which operated in the U.S. in five states.

Forsage’s website allowed retail investors to enter into transactions on various blockchains, including Ethereum, Binance, and Tron. In typical pyramid scheme fashion, these investors were told that they would earn profits if they recruited others into the scheme. The SEC also says that Forsage used the funds from the new investors to pay off the earlier ones.

The SEC filed a complaint about the project in January 2020, with the four founders—Vladimir Okhotnikov, Jane Doe a.k.a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov—being mentioned. The others who were charged were Cheri Beth Bowen, Ronald R. Deering, Samuel D. Ellis, Mark F. Hamlin, Carlos L. Martinez, Alisha R. Shepperd, and Sarah L. Theissen.

The latter group of individuals was charged with violating the registration and anti-fraud provisions of the federal securities laws. The SEC is looking to obtain injunctive relief, disgorgement, and civil penalties.

The SEC has been at the forefront of taking crypto action, and it is handling numerous cases. Earlier