SEC charges 11 people in $300M crypto pyramid, Ponzi scheme

The U.S. Securities and Exchange Commission on Monday has charged 11 individuals responsible for developing and promoting Forsage, an allegedly fraudulent cryptocurrency pyramid and Ponzi scheme that raised over $300M from retail investors across the globe, according to a release. The SEC's complaint, which is seeking injunctive relief, disgorgement and civil penalties, was filed in United States District Court in the Northern District of Illinois. The nearly two-year-old website, which enabled millions of retail investors to transact via smart contracts operating on the ethereum (ETH-USD), tron and binance (BNB-USD) blockchains, was launched in January 2020 by Vladimir Okhotnikov, Jane Doe, Mikhail Sergeev, and Sergey Maslakov, the SEC said. Forsage allegedly incentivized investors to recruit others into the scheme in return for profits. The company "also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure," the SEC explained. Aside from the four founders, the complaint charged Cheri Beth Bowen, Ronald R. Deering, Samuel D. Ellis, Mark F. Hamlin, Carlos L. Martinez, Alisha R. Shepperd, and Sarah L. Theissen, with breaching registration and anti-fraud provisions of the federal securities laws. Ellis and Theissen both agreed to settle the charges without admitting or denying the security agency's allegations. Furthermore, Ellis agreed to pay disgorgement and civil penalties, while Thei...