• 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.


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  • Ben Strack is a Denver-based reporter covering macro and crypto-native funds, financial advisors, structured products, and the integration of digital assets and decentralized finance (DeFi) into traditional finance. Prior to joining Blockworks, he covered the asset management industry for Fund Intelligence and was a reporter and editor for various local newspapers on Long Island. He graduated from the University of Maryland with a degree in journalism. Contact Ben via email at [email protected]