Scam attempts appear to be commonplace in the world of cryptocurrency. This is because no other sector has as many naive people hoping for fast profits.
Furthermore, criminals can easily get away with the money they stole and the anonymous blockchain transactions.
The Forsage platform is the most recent instance that has made news. The business strategy promised investors incredible profits. Users had access to a smart contract designed by Forsage via a wallet, which allowed them to obtain “slots.”
A user earned a promising return on previously purchased slots based on the number of new members he recruited. Furthermore, it was claimed that one would participate in the community’s growth through profit sharing.
The entire structure was therefore built on the notion that the returns were created by the installations of new customers, which corresponded to the traditional snowball method.
The US Securities and Exchange Commission (SEC) filed a lawsuit after the Philippine regulator imposed an injunction in September 2020. It is aimed at a total of eleven people who would have lost over $300 million to millions of private investors. According to the statement:
“The [Forsage] platform did not sell any real, usable products to bona fide retail customers during the relevant period…” There was no apparent source of revenue other than funds received from investors. The way for investors to make money with Forsage was to promote the system to other people”.