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SEC Charges 11 Individuals In $300 Million Forsage Ponzi Scheme

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SEC Charges 11 Individuals In $300 Million Forsage Ponzi Scheme

Summary:

  • The U.S. SEC shared an update on the Forsage debacle.
  • 11 individuals have been charged in connection with the alleged Ponzi scheme.
  • Four of these persons are believed to be the co-founders of Forsage.
  • Authorities claim that the Forsage team stole over $300 million from retail investors worldwide.
  • Others charged by the agency include social media marketers and members of the promotions group, Crypto Crusaders.
  • The news is the latest crackdown by the SEC as it tries to police some crypto activities.
  • Coinbase and Ripple are currently embroiled in legal battles with the watchdog. 

The Securities and Exchange Commission charged team members and social media promoters in connection with the alleged Forsage.io Ponzi scheme which supposedly stole over $300 million from retail investors across the globe.

According to the statement released on Monday, 11 individuals were charged with several counts of fraud and violation of federal securities laws. The charged persons include Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov.

[DB] SEC: Today charged 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million

— db (@tier10k) August 1, 2022

Prosecutors claim that these four individuals launched Forsage in January 2020, to serve as a platform for investors who wanted to invest in cryptocurrencies. The Forsage website powered such operations by providing smart contracts on Binance Smart chain, Ethereum, and Tron.

Forsage allegedly leveraged its growing platform to offer bonuses and rewards to existing investors who referred other investors. The official statement said that the team used assets from previous investors to settle new users in what the agency labeled a “Ponzi structure”. 

Authorities launched cease-and-desist orders in 2020 and 2021, but the team continued to promote Forsage to new users and unsuspecting investors, per Monday’s report. 

In addition, marketers from the large U.S. promotional group Crypto Crusaders were also charged by the agency.

SEC Goes After Crypto Players And Companies 

Monday’s update signals the latest legal proceeding engaged by the Securities and Exchange Commission pertaining to a crypto project or company. The agency recently went after Coinbase over cryptocurrency listings and possible securities violations. 

Ripple also has a lengthy court case with the financial watchdog.

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Ethereum

Huobi Founder Keen On Selling Majority Of His Stake At $3 Billion Value: Report 

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Huobi Founder Keen On Selling Majority Of His Stake At $3 Billion Value: Report 
  • Crypto exchange Huobi’s founder Leon Li is reportedly in talks with financiers to sell his stake in the firm
  • Potential buyers include Justin Sun of Tron and FTX CEO Sam Bankman-Fried

Per a recent Bloomberg report, Huobi founder Leon Li is currently in talks with a bunch of investors to sell the majority of his stake in the Huobi crypto exchange at a price of nearly $1 billion. 

Huobi Founder Is Reportedly In Talks To Sell 60% Of His Stake

Per a recently published Bloomberg report, Huobi’s founder is reportedly in talks with financiers to sell 60% of his stake to potential buyers. The report further states that the deal could be finalized sometime later this month. 

Citing people familiar with the matter, Bloomberg added that the potential list of buyers involves prominent crypto industry names including Justin Sun, founder of cryptocurrency Tron and Crypto billionaire and CEO of FTX exchange Sam Bankman-Fried. The report also adds that SBF and Sun had earlier established talks with Huobi concerning the acquisition of shares.  

In addition to this, the report mentions ZhenFund and Sequoia China as “existing backers,” who were made aware of Huobi’s decision in the shareholder’s meeting held in July. Per the report, Li is seeking a valuation between $2 billion to $3 billion. 

A Huobi spokesperson has shed more details on the matter, reporting that Li is currently in process of conducting a discussion with several international institutions concerning the stake sale, but has refused to offer specific details concerning the transaction. 

“He hopes that the new shareholders will be more powerful and resourceful and that they will value the Huobi brand and invest more capital and energy to drive the growth of Huobi,” the spokesperson said in an emailed statement to Bloomberg

Launched in 2013 in China, Huobi is one of the leading crypto exchanges that has consistently been expanding its work portfolio. The exchange has recently acquired a license to operate and offer services in Australia and had earlier acquired the necessary permissions to operate in New Zealand. 

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Robinhood To Face US Market Manipulation Claims Over “Meme Stock” Rally : Reuters Report

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Robinhood To Face US Market Manipulation Claims Over “Meme Stock” Rally : Reuters Report

TL;DR

  • According to a U.S judge, the stock trading platform Robinhood Markets Inc should face market manipulation claims.
  • This lawsuit was one of many brought against the platform after it temporarily barred customers from purchasing stocks back in Jan 2021, such as GameStop and AMC.
  • Robinhood prices surged in May after the CEO of FTX SBF announced that he had purchased stake in the company.

Robinhood Judge Rules That Robinhood Should Face Market Manipulation Claims

According to Reuters, a U.S Judge ruled on Thursday that stock trading platform Robinhood Markets Inc should face market manipulation claims.

Judge Cecilia Altonaga said in the ruling that investors in GameStop Corp (GME), AMC Entertainment Holdings INC (AMC), and seven other stocks could proceed with the proposed class action lawsuit.

This lawsuit comes after retail trading company Robinhood temporarily barred customers from buying certain stocks in January 2021. 

The “meme stock rally” was mainly social media-fueled, and the shares of the companies mentioned were involved in a short squeeze that led Robinhood and other trading platforms to restrict retail trading. 

Attorneys for Robinhood did not reply to a request for comment. 

Robinhood Stocks Soared after SBF Confirmed he had Stake in company

Robinhood stock prices surged earlier in May of this year after the CEO of crypto exchange FTX Sam Bankman-Fried announced he had purchased a 7.6% stake in the company.

According to the filing, SBF paid a total of $648 million to acquire a 7.6% stake in Robinhood.

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Ethereum Merge Tentative Date Is Set And It’s Sooner Than You Think

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Ethereum Merge Tentative Date Is Set And It’s Sooner Than You Think
  • The Ethereum core developer team has discussed the tentative dates for the Merge to take place.
  • The dates are not definitive; however, the devs have agreed that the Bellatrix update would land on September 6, and the Paris update would target September 15.
  • The Merge is planned to take place before the end of September.
  • It aims to resolve the core problems Ethereum faces today, such as security, scalability, and environmental stability.

The Ethereum Core developer team suggested possible dates for the Merge on their latest Consensus Layer Call earlier today. 

The Merge, which successfully completed the final testnet phase on August 11 of this month, is one of the most anticipated events in Ethereum’s history. 

Read more: Ethereum Price Headed to $2,000 as Ethereum Goerli Merge Goes Live

The initial dates were set on September 17; however, during the call, the core developers agreed on roughly two dates for the main upgrades. The consensus so far is that the 144896 epoch for the Bellatrix upgrade would land on September 6, and the Paris upgrade would be completed by September 15.

As discussed on the call, the developers mentioned that the dates are not definitive and can be changed within the coming weeks. 

The Merge should occur after the Bellatrix mainnet upgrade before the end of September. Ethereum’s Eth token has already rallied 17.5% in anticipation of the Merge. The upgrade will go as scheduled unless the Ethereum hash rate falls significantly, which would cause lower block times and delay the Merge’s expected time. 

The Merge aims to resolve security, scalability, and environmental sustainability. All of these issues have been concerns that have halted Ethereum adoption and the adoption of other cryptocurrencies on the Ethereum network.

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