SEC Charges 11 in Alleged $300M Crypto Pyramid Scheme Forsage

The SEC says alleged crypto pyramid scheme Forsage used assets contributed by new investors to pay earlier backers

article-image

Source: Shutterstock

share

key takeaways

  • Founders of the alleged scheme were last known to be living in Russia, Indonesia and the Republic of Georgia
  • Fraudsters cannot circumvent securities laws by focusing their schemes on smart contracts and blockchains, SEC official says

The SEC has charged 11 people for allegedly creating and promoting a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from retail investors.

Forsage launched in January 2020 and claimed to allow investors to enter into lucrative deals powered by smart contracts that operated on the Ethereum, Tron and Binance blockchains, according to the SEC. 

But, the agency said in a Monday statement that investors earned profits by recruiting others into the scheme. Forsage also allegedly used assets from new investors to pay earlier investors — the hallmark of a Ponzi scheme.

The SEC’s complaint charges Forsage founders Vladimir Okhotnikov, Lola Ferrari, Mikhail Sergeev and Sergey Maslakov, who were last known to be living in Russia, the Republic of Georgia and Indonesia. It also charges three US-based promoters tasked with endorsing the platform on its website and social media, as well as several members of a group called Crypto Crusaders — a unit operating out of five different states that advertised the scheme. 

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched 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. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

The SEC of the Philippines issued a cease-and-desist action against Forsage in September 2020, as did the Montana Commissioner of Securities and Insurance in March 2021. But the defendants denied the claims in YouTube videos and allegedly continued the scheme, according to the SEC.

Forsage’s YouTube channel, which is still online, claims that its users have generated “700,000 in Ethereum” and “1,700,000 in TRON” and $57 million in stablecoin binance USD. A video promising “a new launch” was published 10 days ago.

The SEC’s complaint seeks injunctive relief, disgorgement and civil penalties.

Two of the defendants, Kentucky resident Samuel Ellis and Wisconsin resident Sarah Theissen, agreed to settle the charges. Ellis agreed to pay disgorgement and civil penalties, according to the SEC, while Theissen will be required to pay disgorgement and civil penalties.

Regulators have so far been busy targeting crypto-related fraud this year. The Commodity Futures Trading Commission (CFTC) charged four individuals in March with fraud surrounding an alleged crypto Ponzi scheme that raised more than $44 million of bitcoin.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (1).jpg

Research

Jupiter has emerged as the undisputed liquidity backbone of Solana, commanding over 90% of spot DEX aggregation and 80% of perp trading volume. But behind the numbers lies a far more ambitious play: a cross-chain, vertically integrated super-app spanning swaps, synthetics, NFTs, memecoins, and launchpads. This report explores Jupiter’s rapid rise, the monetization upgrades reshaping its revenue profile, and the risks that could unwind its dominance, from token dilution to competition. With annualized revenues nearing $300M, the upside is undeniable, if it can navigate the turbulence.

article-image

In recent weeks, Helium has hit new all-time highs while passing major protocol milestones

article-image

Financial advisers in a January survey said equity ETFs were their top choice for gaining crypto exposure in 2025

article-image

“Why put a target out there that’s really speculative, not knowing exactly where this environment is going to go?” CarMax CEO Bill Nash said

article-image

While the head of Base may support legal sex work, Coinbase policies prohibit said workers from using its exchange.

article-image

EVM bottlenecks fundamentally hold back Ethereum’s scalability

article-image

In 2011, WikiLeaks faced a financial blockade imposed by the US government. It was Bitcoin’s first major test.