The SEC announced Monday that it had charged 11 people in an alleged international Ponzi and pyramid scheme that tricked millions worldwide to invest more than $300 million on the Forsage platform.
The exterior of the Securities and Exchange Commission's headquarters is pictured.
According to the SEC, Forsage was a traditional Ponzi scheme, where money was funneled to early investors and paid to those who convinced others to join.
The SEC alleges that Forsage used the assets deposited onto the platform to deliver profits to higher up in the pyramid.
The SEC charged Forsage's four foreign-based founders, who were last known to live in Georgia, Indonesia and Russia, as well as seven Americans who promoted Forsage who the SEC seeks to agree to return profits.
Despite cease-and-desist orders from the SEC of the Philippines, Forsage continued to operate.
Forsage claimed that the company had over one billion dollars in lifetime revenues and 2.1 million users.
In the last few months, the SEC has expanded its regulation ofcryptocurrencies, increasing the number of positions from 30 to 50. The SEC arrested three people last month, including a former product manager at a digital currency exchange. The price of bitcoin has fallen more than 50% this year and several firms have laid off workers.
Carolyn Welshhans, the acting chief of the SEC's Crypt Assets and Cyber Unit, called Forsage a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors.
The ex-manager and another person were indicted for their alleged involvement in a $1.1 million insider trading scheme.
All the big layoffs, record withdrawals and bankruptcies were caused by the $2 trillion crash in the stock market.
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