Critical risk level Prosecuted

Forsage

Smart-contract pyramid scheme the SEC says raised over $300 million; eleven people were charged in 2022 and its founders were indicted in a case the DOJ valued at $340 million.

Also known as: Forsage.io, Meta Force

Type of scam

Ponzi and High-Yield Scheme

Jurisdiction

United States / Russia / Georgia / Indonesia

First reported

Jan 2020

Last known activity

Aug 2022

How this operation works

Forsage presented itself as a decentralised matrix platform: investors bought "slots" in a smart contract on Ethereum, Tron and Binance Smart Chain, and earned by recruiting others into positions beneath them. Because the logic ran on-chain, it was marketed as trustless and therefore incapable of being a scam. The SEC charged eleven individuals on 1 August 2022, alleging that Forsage operated as a pyramid scheme for more than two years, that investors earned primarily by recruiting, and that assets from new investors were used to pay earlier ones in a standard Ponzi structure — raising more than $300 million from retail investors worldwide. A DOJ indictment in the District of Oregon put the figure at $340 million. What makes this entry instructive is what came before the charges: the Securities and Exchange Commission of the Philippines issued a cease-and-desist against Forsage in September 2020, and the Montana Commissioner of Securities and Insurance followed in March 2021. The SEC alleges the defendants kept promoting the scheme anyway, denying the regulators' findings in YouTube videos and elsewhere. Published warnings had been available to anyone who searched for roughly two years before the US charges landed.

Warning signs people reported

Earnings came from recruiting others rather than from any external revenue
"Decentralised" and "on-chain" used as an argument that fraud was impossible
Public cease-and-desist orders from two regulators, publicly denied rather than answered
Matrix or "slot" structures in which you must fill positions beneath you to earn
Promotion driven by video testimonials from people who profited early

Websites and domains

forsage.io Unknown

Named in the SEC complaint as the site through which investors entered the smart contracts.

What this operation claims about itself

Recorded as claimed. The licence check below is what we were able to verify.

Company name given: None — promoted as a decentralised protocol with no operating company
Regulator named: None

Licence check

No licence on record

Cease-and-desist orders were issued by the Securities and Exchange Commission of the Philippines in September 2020 and by the Montana Commissioner of Securities and Insurance in March 2021, both before the SEC's 2022 action.

Official warnings

Have you lost money to this operation?

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