The Forsage Founders Are Facing Charges In A $340 Million DeFi Cryptocurrency Fraud

A federal grand jury in the District of Oregon charged four creators of Forsage, a cryptocurrency investment platform, for their alleged involvement in a worldwide Ponzi and pyramid scam that collected roughly $340 million from victim investors. The creators are Russian citizens Vladimir Okhotnikov, alias Lado, Olena Oblamska, aka Lola Ferrari, Mikhail Sergeev, aka Mike Mooney, aka Gleb, aka Gleb Million, and Sergey Maslakov. The accused reportedly used social media to push Forsage as a valid and profitable business chance, promoting it as a decentralized matrix project built on network marketing and “smart contracts” on the blockchain.

Accused use smart contracts for Ponzi pyramid scam

According to court papers, the accused programmed and implemented smart contracts on the Ethereum, Binance Smart Chain, and Tron blockchains to organize their joint Ponzi pyramid scam. According to an analysis of the computer code underlying Forsage's smart contracts, when an investor invested in Forsage by purchasing a “slot” in a Forsage smart contract, the smart contract automatically diverted the investor's funds to other Forsage investors, such that earlier investors were paid with funds from later investors.

Through Forsage's website and various social media platforms, the defendants fraudulently advertised Forsage to the public as a valid, low-risk, and profitable business chance. However, blockchain analytics verified that more than 80% of Forsage participants got less Ethereum than they had deposited in Forsage's Ethereum program, with more than 50% never getting a single payment. Furthermore, the defendants reportedly programmed at least one of Forsage's accounts in such a way that investors' funds were illegally transferred out of the Forsage investment network and into altcoin accounts under the founders' control, contradictory to statements made to Forsage investors.

The suspects are charged with conspiring to conduct wire theft and risk a potential sentence of 20 years in jail if convicted. The FBI Portland Field Office, USPIS, and HSI New York's El Dorado Task Group examined the matter. The case is being prosecuted by the Criminal Division's Fraud Section and Deputy United States Attorneys for the District of Oregon.

DOJ and FBI committed to tackling DeFi scams

The Department of Justice has stressed its dedication to holding scammers who defraud investors responsible, including those in the new DeFi sector. The FBI has proven its ability to discover complex scams involving bitcoin and digital assets by utilizing all available research tools, including blockchain analysis. The FBI has also reaffirmed its dedication to researching and prosecuting individuals who plan schemes and try to swindle consumers.

The case emphasizes the significance of exercising care when contemplating assets and performing due research before giving money or confidential information to any individual or group. As technology continues to develop, thieves are also discovering new methods to organize illegal plans. As a result, law enforcement organizations must stay alert and work together to catch offenders no matter what new tactics they employ.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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