The Securities and Exchange Commission said on Monday that it charged 11 people for their roles in creating and promoting fraudulent crypto pyramids and Ponzi schemes worth more than $300 million from retail investors around the world, including the United States.
The four founders of the scheme named Forces were among those accused. The SEC said in a statement that they were last known to live in Russia, the Republic of Georgia and Indonesia.
The accused persons could not be immediately reached for comment.
According to the SEC’s complaint, the scheme’s website was launched in January 2020 and allowed millions of retail investors to transact through smart contracts. The SEC said it allegedly operated as a pyramid scheme for more than two years, in which investors profited by recruiting others.
The SEC’s complaint states that Forces allegedly used the assets of new investors to make payments to earlier investors in a specific Ponzi structure.
“Forces is a fraudulent pyramid scheme that has been mass-launched and aggressively marketed to investors,” said Carolyn Welshhans, Acting Head of the SEC’s Crypto Assets and Cyber Unit. “Fraudsters cannot circumvent federal securities laws by focusing their plans on smart contracts and blockchains.”
The SEC said that without admitting or denying the charges, the two defendants agreed to settle the charges and one of them agreed to pay the penalty.