Despite Warnings from Regulators, the Ethereum Fueled Pyramid Scheme Forsage Thrives
While Ethereum has seen a number of benefits from the decentralized finance (defi) movement and initial coin offerings (ICOs), more recently individuals have been leveraging ether for pyramid schemes and matrix cycler programs. One particular scheme crypto enthusiasts are discussing these days is the gifting pyramid scheme called Forsage.
Following the demise of a number of Onecoin masterminds and the recent charges against Plustoken and Wotoken members, another massive pyramid scheme has been raking in funds. The project is called Forsage and it has attracted a lot of ethereum deposits since it launched in February 2020.
According to the web portal dappstats.com, Forsage is considered “high risk,” but still managed to see $2.8 million worth of ethereum (ETH) in volume during the last seven days. Essentially, Forsage is a matrix cycler program that claims to offer users the ability to make ‘passive income’ by simply signing up more partners.
At the time of writing, the Forsage website tells the visitor they can invest 0.05 ETH ($18.34) to join, and the more people they sign up, the more money they can allegedly make. The Forsage website cunningly says the operation is a “simple relationship.”
“The more partners, the more of the money collected,” the Forsage FAQ notes. In order to complete the first round of the matrix cycle, the investor must get three referrals in on the Forsage scheme, and from here the ladder continues.
The page also gives an example of one user called “ID 8679” who is allegedly making over $700k, and soon will be a “millionaire.”
However, the Philippines based matrix cycler Forsage is considered a Ponzi scam that could end in a matter of no time. A few crypto proponents have been speculating on the Forsage project and how it has attracted a lot of ETH since it launched.
Primitive Ventures founding partner Dovey Wan recently discussed the Forsage pyramid scheme on Twitter. Wan said a lot of the Ethereum network’s liveliness stems from Forsage.
“The ETH price floor is not from a few foodcoin scams or a potential defi vault explosion, sadly is from the liveness of Forsage, the ongoing ETH version Plustoken,” Wan tweeted. “I just checked its activity which is still thriving, feeling comfy,” she added.
Edward Morra responded to Wan’s tweet and also shared a graph showing the amount of ETH sent to Forsage since it’s inception. Morra’s chart shows that the deposits have been slowing down, which could mean an exit could be in the cards very soon.
“It’s pretty scary considering the amount of ETH sent is decreasing for some sustained time now,” Morra wrote. “Meaning this Ponzi will soon stop functioning like all Ponzis.”
Additionally, the Forsage scheme has continued after the Philippines Securities and Exchange Commission (SEC) published a warning about Forsage.
“Forsage, which is headed by Lado Okhotnikov, is not duly registered with the SEC and lacks the necessary license to solicit, accept or take investments from the public or issue investment contracts and other forms of securities,” the warning notes.
The SEC letter highlights:
Active income generated from the compensation plans depends on the number of referrals and/or membership fees gathered while passive income is acquired through spillovers. Aside from lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, where investors are paid using the contribution of new investors, according to the SEC.
In a Medium post written by Badmlm the writer notes that all Forsage does is offer an ethereum-based gifting pyramid scheme disguised as “crowdfunding.”
“Pay ethereum to join for the ability to refer other suckers, to get paid ethereum so they can do the same,” the review details.
“People think it’s all legit and some kind of revolutionary way to earn Ethereum daily, because it’s handled with smart contracts on the Ethereum blockchain. Don’t be fooled by all the smoke and mirrors, it’s still an illegal pyramid scheme,” Badmlm concludes.
What do you think about the Forsage pyramid scheme? Let us know what you think about this subject in the comments below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Etherscan, SEC, Edward Morra, Twitter, Dappstats.com
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