Montana regulator calls out Forsage for running a pyramid scheme on Ethereum

Mar 29, 2021 | The Block News | 0 comments


Montana’s securities regulator ordered the operator of Forsage, an investment scheme built on Ethereum and widely viewed as a pyramid scam, to stop its work within the state. 

The developments signify the first such action in the U.S. against Forsage, a so-called “online marketing matrix program.” Participants make money depending on how many successful referrals they make — a strategy that echoes a Ponzi scheme, by which earlier investors are paid out with the proceeds taken from newer ones.

Forsage apparently attracted the attention of the Securities and Insurance Office of the Montana State Auditor, with Commissioner Troy Downing ordering a cease-and-desist on March 22.

“Forsage does not try to hide the fact they are a pyramid scheme. Members must pay with Ethereum cryptocurrency to the person above them to buy a position on the pyramid. The currency used to buy the position goes directly to the participant above,” the agency said.

A request for comment sent to the Montana regulator was not returned by press time, including specifics on the scale of Forsage’s operations in the U.S. state. 

In September, Forsage was subject to a similar cease-and-desist order from government officials in the Philippines, the scheme’s country of operations. At the time, the Philippines’ Securities and Exchange Commission similarly identified Forsage as a classic pyramid scheme posing as a crowdfunding platform. Since that heightened scrutiny began, Forsage has seen its volumes collapse, according to information published by DappRadar.

But even before authorities got involved, the crypto world identified malicious projects including Forsage as problem points amid spiking gas fees on the Ethereum network last spring.

© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

News Source from

Related Articles

Elon Musk Discloses ‘Tesla Has Not Sold Any Bitcoin’

Elon Musk Discloses ‘Tesla Has Not Sold Any Bitcoin’

Amid speculation over the weekend that Tesla may have sold its bitcoins, CEO Elon Musk has clarified that the electric car company “has not sold any bitcoin.” The Technoking of Tesla got into a heated debate with the bitcoin community Sunday after he announced that...

Bitcoin and Ethereum usage fees drop 70–80% as market slide continues

Bitcoin and Ethereum usage fees drop 70–80% as market slide continues

Transaction fees are falling rapidly on Bitcoin and Ethereum, as the coin prices of both recede from recent peaks. Transaction fees on Bitcoin and Ethereum have fallen by 81% and 71% respectively over the last few weeks, as the broader cryptocurrency market continues...

Pin It on Pinterest

Share This