Security News > 2023 > February > Forsage DeFi platform founders indicted for $340 million scam
A Federal grand jury in the District of Oregon has indicted four Russian nationals founders of Forsage decentralized finance cryptocurrency investment platform for allegedly running a global Ponzi and pyramid scheme that raised $340 million.
The defendants, Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev, and Sergey Maskalov, face charges of running aggressive false advertisements on social media, pushing misleading investment and business opportunities related to Forsage to aspiring investors.
"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," - U.S. Department of Justice.
Using blockchain forensic analysis, it was confirmed that over 80% of Forsage investors received less ETH than they had invested through Forsage.
Court documents show that the platform's founders used malicious code to direct large portions of the investor funds outside Forsage and into cryptocurrency wallets they controlled.
It is worth noting that Forsage's website and social media channels are still online, claiming that the platform has distributed over $2.3 billion to over 2 million investors, or $1.5 billion to 2.7 million investors.