The US Securities and Exchange Commission (SEC) on August 1 accused 11 people of creating and promoting a Ponzi scheme of cryptocurrency fraud.

In the alleged group there are 4 founders of this model. The SEC report says they live in Russia, Georgia and Indonesia. This platform, called Forsage, has raised more than 300 million USD from individual investors globally, including the US.

According to the SEC’s allegation, the website of this model, launched in January 2020, allows millions of individual investors to deposit digital assets and trade through smart contracts. This is a special protocol, capable of automatically implementing terms or agreements between parties thanks to blockchain technology.

The SEC considers Forsage to be a pyramid scheme. Investors profit by attracting more people into the network. Forsage is also accused of using new investors’ assets to pay first comers. This is a typical Ponzi pattern.

“Forsage is a pyramid scheme, conducted on a massive scale and heavily advertised to investors,” said Carolyn Welshhans, director of digital assets at the SEC. Scammers will not be able to circumvent federal securities laws by focusing on smart contracts and blockchains.”

Global authorities have repeatedly moved to shut down the platform. However, the defendants are said to have still tried to advertise Forsage on YouTube and other media.

The SEC report said that two of the four defendants neither admitted nor denied the allegations and agreed to settle the case.