US Regulators Charge Forsage Operators after Philippine SEC Exposes Crypto Pyramid Scam
The U.S. Securities and Exchange Commission (SEC) charged a total of 11 individuals who worked as Forsage Operators and raised $300 million from investors around the world, including the Philippines.
Forsage.io was launched in January 2020. Its website allowed investors to enter into transactions via smart contracts that operated on Ethereum, Tron, and Binance blockchains. It endorsed its scheme on its website, social media platforms, and its promotional group called the “Crypto-Crusaders.”
The operation was in fact a pyramid scheme where investors earned profits by recruiting subsequent investors. The assets from the newer investors were then used to pay earlier investors.
The Philippine SEC issued a cease and desist order (CDO) against Forsage for illegal solicitation through its crowdfunding platform. The Philippine SEC noted that Forsage was not a registered corporation or partnership and was not qualified to operate as a crowdfunding entity in the Philippines. It was also not registered with the Bangko Sentral ng Pilipinas, which requires all entities engaged in virtual currencies to register as a remittance and transfer company.
The Philippine SEC then assisted the US SEC in its investigation of Forsage’s fraudulent activities by sharing the information gathered by the Enforcement and Investor Protection Department.
The full press release can be found here.