a month ago 1 min read

DOJ Charges Forsage Founders With $340 Million DeFi Ponzi Scheme


Charges against the four Forsage founders include using a Ponzi scheme to defraud the US Department of Justice (DOJ).

US Department of Justice's official website stated that the four founders of the crypto-pyramid project Forsage have been charged with participating in a $340 million DeFi Ponzi scam.

Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov are the four defendants who are accused of conspiring to commit wire fraud. If found guilty, they could each receive up to 20 years in prison.

In January 2020, they introduced Forsage.io, a platform that uses smart contracts to let millions of retail investors trade on the Ethereum, Tron, and BNB Chain. By enticing others to sign up for the program and using New Investor Assets to pay early investors in a typical Ponzi scheme structure, they can profit.

A Ponzi scheme-conforming analysis of the computer code underlying Forsage's smart contracts is said to have shown that as soon as an investor invests in Forsage by purchasing a "position" in Forsage, the smart contract will automatically transfer investor's funds to other Forsage investors, resulting in the payment of earlier investors with funds from later investors.

Using the Forsage website and social media channels, the defendants misrepresented Forsage to the general public as a reliable, low-risk, and profitable investment opportunity.

However, blockchain analyses have confirmed that over 80% of Forsage investors have received less ETH than they invested in Forsage’s Ethereum program, with over 50% never receiving a return receive any payment.

In August 2021, eleven individuals were charged by the US SEC with developing the $300 million cryptocurrency scam known as Forsage.

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