Philippine SEC calls popular Ethereum application a financial pyramid
The Philippine Securities and Exchange Commission believes Forsage, currently consuming a significant portion of Ethereum resources, is hiding a pyramid scheme.
The regulator published a warning on its website, according to which users should immediately stop interacting with Forsage, and its creators should register..
Forsage is described as “a fully decentralized matrix marketing project”, “the most thoughtful of its kind”. At the same time, it demonstrates the features typical of many financial pyramids. Forsage users are encouraged to make money by attracting other investors to the scheme, where after filling one level of slots, a transition to the next one with increased profitability occurs.
According to DappStats, currently Forsage is the most demanded decentralized application on the Ethereum blockchain, but the resource creators are considered high-risk. Forsage’s turnover in 24 hours was over 12,000 ETH or $ 2.86 million. According to EthGasStation, Forsage ranks fourth in terms of gas consumption in the last 30 days.
“Based on numerous reports and information collected by the Commission, it was established that the entity operating under the name Forsage and headed by Lado Okhotnikov attracts investments without authorization,” the regulator writes. “The so-called Forsage smart contract has the characteristics of a security in the form of an investment contract, in which investors do not need to make any effort other than initially investing money in the scheme to make a profit.”.
The commission also says it has already contacted the Forsage administration and received a response. Representatives of the service said that it will continue to work, even if their site is closed, as it is decentralized and is out of the reach of the authorities..
Earlier, the activity of the financial pyramid MMM Global caused congestion in the Ethereum blockchain.
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