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US securities regulator accuses people of running a pyramid scheme.

Following an investigation with the help of the SEC Philippines, the US Securities and Exchange Commission (SEC) has filed charges against the creators and promoters of the fraudulent pyramid scheme run by Forsage.

According to a statement released by the US SEC on August 1, 11 people have been charged for their involvement in developing and marketing Forsage, which is accused of raising more than $300 million from millions of retail investors across the globe, including those in the Philippines.

In addition to members of Forsage’s promotional group called Crypto-Crusaders, the largest promotional group for the scheme that operated in the United States from at least five different states, the US SEC also charged the company’s four founders and three US-based promoters who were discovered to be endorsing the investment scam on its website and social media platforms.

Emilio Aquino, chair of the SEC Philippines, said in a statement on Wednesday, “We at the SEC Philippines appreciate the US SEC for taking down an investment fraud of this scope and proportion, stopping it from further victimizing vulnerable victims across the globe.”

“The SEC Philippines is always willing to work with its counterparts in other countries and other regulators to combat investment fraud around the globe. As we work toward the shared objective of safeguarding the investing public, we are dedicated to advancing the rights and welfare of investors, he said.

Forsage.io was started in January 2020 by Vladimir Okhotnikov, Jane Doe (also known as Lola Ferrari), Mikhail Sergeev, and Sergey Maslakov. Millions of small-scale investors were able to transact through the website using smart contracts that worked with the Ethereum, Tron, and Binance blockchains.

In reality, Forsage has been running as a pyramid scheme for more than two years, where investors profited by signing up new members.

In a classic Ponzi scheme, Forsage also used assets from new investors to pay out earlier investors.

By sharing the data amassed by the former’s Enforcement and Investor Protection Department throughout the course of its own investigation, the SEC Philippines helped the U.S. SEC in the investigation of the fraudulent investment-taking activities of Forsage.

On September 27, 2020, the SEC Philippines issued a cease and desist order (CDO) against Forsage for soliciting investments unlawfully using a crowdfunding website that purportedly used Ethereum blockchain technology.

According to the decision, Forsage was not authorized to conduct business as a crowdfunding firm in the Philippines and was not registered with the SEC Philippines as a corporation or partnership.

The committee also discovered that Forsage was not registered with the Bangko Sentral ng Pilipinas, which mandates that all organizations dealing in virtual currencies in the nation must do so.

Along with the CDO, the SEC Philippines also released a warning on June 30, 2020, urging the public to abstain from participating in any scheme run by Forsage and other organizations with a similar focus on promoting investment opportunities in cryptocurrencies and other digital assets that have not been registered with the Commission.

The SEC advisory was the first to identify Lado Okhotnikov, also known as Vladimir Okhotnikov, as Forsage’s principal.

Forsage was also given a cease-and-desist order by the Montana Commissioner of Securities and Insurance to stop conducting fraud in March 2021.

The defendants, however, persisted in promoting the scheme while disputing the allegations in a number of YouTube videos and other places.

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