Forsage founders indicted over $340M DeFi ‘Ponzi scheme’

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The founders behind Forsage, an alleged $340 million “global Ponzi” scheme, have been indicted by a federal grand jury in the Oregon District.

The four Russian founders — Vladimir Okhotnikov, Olena Obramska, Mikhail Sergeyev and Sergei Maslakov — are officially defendant Playing a key role in a scheme that raised about $340 million from victim investors, according to a February 22 statement from the Department of Justice (DOJ).

“Today’s indictment is the result of a rigorous investigation that took months to piece together hundreds of millions of dollars of systematic theft,” added U.S. Attorney for the Oregon District Natalie Wight.

“Using new technology to prosecute foreign actors who have misbehaved in emerging financial markets is a complex endeavor only possible with the full and complete coordination of multiple law enforcement agencies.”

Forsage advertised itself as a low-risk decentralized finance (DeFi) platform built on the Ethereum (ETH) blockchain that allows users to generate long-term passive income. Analysis revealed that 80% of Forsage “investors” received it. Less back than they put in.

According to the DOJ, an analysis of the smart contracts showed that funds raised by new investors buying “slots” of Forsage smart contracts were diverted to older investors, consistent with a “Ponzi scheme.” It became clear.

Forsage still has an active Twitter account, and posted a thread on February 22nd claiming that community members participating in the “Ambassador Program” can earn monthly rewards for completing certain tasks. .

On August 1, 2022, the Securities and Exchange Commission (SEC) indicted four founders and seven promoters for fraud and selling unregistered securities, and Carolyn, deputy chief of the SEC’s Crypto Assets and Cyber ​​Unit. Welshhans said at the time:

“Cheaters cannot bypass federal securities laws by focusing on smart contracts and blockchain.”

The Philippine Securities and Exchange Commission had also flagged Forsage as a likely Ponzi in 2020, but a month later the platform was still the second most popular DApp on the Ethereum blockchain.

Related: Crypto, forex platform CEO pleads guilty to $248 million fraud scheme

A prosecution is when a prosecutor files a criminal complaint and accuses an individual or group of crimes, but the prosecutor, after investigation, is able to convince a majority that formal charges are warranted. , the indictment will be submitted by a grand jury. .

Grand juries are common in federal and serious state felony crimes.