The founders of a purported decentralized finance (DeFi) crypto trading platform are being accused by U.S. authorities of operating a US$340-million global DeFi Ponzi scheme.
A federal grand jury in Oregon indicted the founders of the Forsage platform — Russian citizens Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev and Sergey Maslakov — charging them with conspiracy to commit wire fraud.
The allegations have not been proven, and the four are presumed innocent.
According to U.S. authorities, the scheme was aggressively promoted on social media as a low-risk investment opportunity based on network marketing and “smart contracts.”
“But in reality, the defendants operated Forsage as a Ponzi and pyramid investment scheme that took in approximately US$340 million from victim-investors around the world,” authorities alleged.
It’s alleged that the Ponzi scheme was coded into Forsage’s smart contracts.
“Analysis of the computer code underlying Forsage’s smart contracts allegedly revealed that, consistent with a Ponzi scheme, as soon as an investor invested in Forsage by purchasing a ‘slot’ in a Forsage smart contract, the smart contract automatically diverted the investor’s funds to other Forsage investors, such that earlier investors were paid with funds from later investors,” they said.
Additionally, court documents alleged that at least one of the smart contracts siphoned investors’ funds out of the Forsage network into crypto accounts under the founders’ control.
“Today’s indictment showcases the department’s ability to use all available investigative tools, including blockchain analysis, to uncover sophisticated frauds involving cryptocurrency and digital assets,” said Kenneth Polite Jr., U.S. assistant attorney general.