• The founders of a DeFi crypto investment platform, Forsage, have been indicted by the federal grand jury in the District of Oregon for running a $340 million Ponzi scheme.
• The defendants reportedly promoted Forsage as a decentralized matrix project based on network marketing and smart contracts.
• The DOJ noted that Forsage operated as a Ponzi and pyramid investment scheme, taking approximately $340 million from victim investors globally.
Forsage Platform Founders Indicted
The founders of Forsage, a decentralized finance (DeFi) crypto investment platform, were recently indicted by the federal grand jury in the District of Oregon for running a $340 million Ponzi scheme. The four indicted individuals are Vladimir Okhotnikov, Mikhail Sergeev, Sergey Maslakov, and Olena Oblamska – citizens of the Russian Federation.
How Did They Operate?
The defendants promoted Forsage to the public through social media platforms as a legitimate business; however it was not true. In reality, they operated Forsage as a Ponzi and pyramid investment scheme – taking approximately $340 million from victim investors globally. A Ponzi scheme is an illegal form of fraud which pays earlier investors with funds collected from new investors.
Smart Contracts Involved
Forsage relied on smart contracts on Ethereum (ETH), Binance Smart Chain, and Tron blockchains that were consistent with their Ponzi scheme activities. When investors invested in Forsage by purchasing a „slot“ in a Forsage smart contract, their funds were automatically diverted to other Forsage investors.
Justice Department’s Stance
Assistant Attorney General Kenneth A. Polite Jr., of the Justice Department’s Criminal Division stated: “The department is committed to holding accountable fraudsters who cheat investors, including in the emerging DeFi space…Today’s indictment results from a rigorous investigation that spent months piecing together the systematic theft of hundreds of millions of dollars.“
This case serves as an important reminder to all potential cryptocurrency/DeFi platform users/investors to conduct thorough research before investing any money into such projects or schemes.