Benzinga - A federal grand jury in the District of Oregon has charged four founders of Forsage, a purportedly decentralized finance (DeFi) cryptocurrency investment platform, with running Ponzi and pyramid scheme that raised approximately $340 million from victim investors.
What Happened: The accused Russian nationals allegedly touted Forsage as a decentralized matrix project based on network marketing and “smart contracts,” which are self-executing contracts on the blockchain.
The U.S. Department of Justice's Criminal Division, the FBI Portland Field Office, the U.S. Postal Inspection Service (USPIS), and Homeland Security Investigations (HSI) New York’s El Dorado Task Force were all involved in the investigation.
Assistant Attorney General Kenneth A. Polite Jr. of the U.S. Department of Justice's Criminal Division said, "Today’s indictment showcases the department’s ability to use all available investigative tools, including blockchain analysis, to uncover sophisticated frauds involving cryptocurrency and digital assets."
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U.S. Attorney Natalie Wight for the District of Oregon added, "Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies."
Why It Matters: According to court documents, the defendants allegedly coded and deployed smart contracts that systematized their combined Ponzi pyramid scheme on the Ethereum (CRYPTO: ETH), Binance Smart Chain (CRYPTO: BNB) and Tron (CRYPTO: TRX) blockchains.
Over 80% of Forsage investors received fewer Ethereum back than they had invested in Forsage’s Ethereum program, with more than 50% of investors never receiving a single payout.
The accused face a maximum penalty of 20 years in prison if convicted.
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