Crypto Pyramid Scheme Lands 11 in Trouble, SEC Sharpens Focus Around DeFi

A total of 11 individuals in the US have been charged with whipping-up a crypto pyramid scheme, defrauding “millions of retailers”, and churning over $300 million (roughly Rs. 2,359 crore). The charges were laid in a United States District Court in Illinois. The Securities and Exchange Commission (SEC) has alleged that these eleven people kept increasing the number of members in their scheme by promising them rewards for recruiting more members. The SEC has categorised this case to have been in a “typical Ponzi structure”.

The group of the accused individuals formed a platform called ‘Forsage’ and enabled new investors to set-up a crypto-asset wallet and purchase ‘slots’ from Forsage’s smart contracts. These slots would give them the right to earn compensation from others whom they recruited into the scheme.

“Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors. Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains,” Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit said in a statement.

The founding team of Forsage has been charged with violating “Unregistered Offers and Sales of Securities” and “Fraud” under the US Securities Act.

The US authorities have tightened the monitoring around decentralised protocols to ensure that the anonymity they offer, is not misused by exploiters.

The activity of crypto scammers has risen in number in the US, owing to the escalating adoption rate of cryptocurrencies.

Last week, Ryan Felton, a Hollywood producer from Atlanta, has pleaded guilty to have been scamming crypto investors in order to maintain his extravagant lifestyle.

In July, a report by transparency advocate and publisher, the BanklessTimes said that American crypto investors lost $185 million (roughly Rs. 1,500 crore) between January 2021 and March 2022 to romance scams and over $1 billion (roughly Rs. 8,000 crore) in total to other fraudulent activities.


For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechNewsBoy.com is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.