It is believed that Forsage founders stole approximately $340 million from investors around the world.
The United States Department of Justice (DOJ), a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the country, has revealed that a federal grand jury indicted four individuals for their roles in a “global Ponzi and pyramid scheme.”
According to the press release published on February 23rd, the indicted individuals are founders of the decentralized finance (DeFi) crypto investment platform Forsage.
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In the statement, US DOJ alleges that four Russian nationals, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maslakov, stole around $340 million from crypto investors around the world.
When talking about the indictment, US Attorney Natalie Wight for the District of Oregon said it is a result of a “rigorous investigation” into “the systematic theft of hundreds of millions of dollars.”
Bringing charges against foreign actors who used new technology to commit fraud in an emerging financial market is a complicated endeavor only possible with the full and complete coordination of multiple law enforcement agencies.
US authorities believed that malicious actors coded and deployed smart contracts on Ethereum (ETH), Binance Smart Chain, and Tron blockchains. The scheme was reportedly created so that as soon as an investor purchased a “slot” from Forsage, “the smart contract automatically diverted the investor’s funds to other Forsage investors.”
Therefore, earlier investors received payments from funds deployed by later investors. On top of that, the DOJ stated that Forsage used its website and various social media platforms to mislead investors, claiming that it is a “legitimate, low-risk, and lucrative investment opportunity.”
During the investigation, federal prosecutors collaborated with a blockchain analytics firm, which found that 80% of investors received fewer cryptocurrencies, such as Ether (ETH), back than they had invested. On top of that, 50% of investors claimed that they did not receive a single payout.
Four Russian nationals are charged with “conspiracy to commit wire fraud,” which can put them behind bars for 20 years maximum.
US authorities continue to tighten their grip on Russia-related entities. At the beginning of February, OFAC sanctioned two crypto wallet addresses linked to the Russian sanctions evasion network.
