Digital Assets: Russian Perpetrators Of Ponzi Forsage DeFi Platform Indicted
The four Russians face as much as 20 years in prison if convicted on the charges.
Four individuals from Russia, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov, have been indicted in the US for allegedly running a global Ponzi scheme through their decentralized finance (defi) crypto platform, Forsage. The US Justice Department announced that the platform had defrauded investors of around $340 million. The accused are each charged with conspiracy to commit wire fraud and could face a maximum of 20 years in prison if found guilty. (Bitcoin.com)
Forsage was advertised as a legitimate, lucrative, and low-risk business opportunity that used a decentralized matrix project based on network marketing and smart contracts. However, it was set up and run as a Ponzi and pyramid investment scheme, which defrauded investors around the world. Some of the accused used aliases to aggressively promote the platform through its website and social media.
Analysis of the code used in Forsage showed that as soon as someone invested in the platform by purchasing a “slot” in a smart contract, the funds were used to pay earlier Forsage investors. Blockchain forensics confirmed that over 80% of investors received less ether (ETH) than they had invested in the Ethereum program. Additionally, at least one smart contract was used to divert investors’ money to cryptocurrency accounts controlled by the founders.
The indictment comes after the US Securities and Exchange Commission (SEC) charged 11 individuals, including the four co-founders and seven promoters of the platform, in August last year for their participation in creating and promoting the fraudulent crypto pyramid and Ponzi scheme. Forsage was launched online in January 2020.
US Attorney Natalie Wight for the District of Oregon highlighted that the indictment was the result of a months-long investigation and that bringing charges against foreign actors who use new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies.
Related Story: This Dangerous New Crypto Scam Is Called “Pig Butchering”
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