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While Ethereum has seen a number of benefits from the decentralized finance movement (defi) and initial coin offerings (ICOs), more recently people have been leveraging the ether for pyramid schemes and matrix cycle programs. One particular scheme that crypto enthusiasts are discussing these days is the gift pyramid scheme called Forsage.
After the disappearance of a number of Onecoin minds and the recent allegations against members of Plustoken and Wotoken, another huge pyramid scheme has raised funds. The project is called Forsage and has attracted many ethereum deposits since it was launched in February 2020.
According to the web portal dappstats.com, Forsage is considered “high risk”, but still managed to see a volume of $ 2.8 million in ethereum (ETH) in the past seven days. Essentially, Forsage is a Matrix cycler program that claims to offer users the ability to make “passive income” by simply registering multiple partners.
At the time of writing, the Forsage website tells the visitor that they can invest 0.05 ETH ($ 18.34) to sign up, and the more people sign up, the more money they can supposedly earn. The Forsage website cunningly states that the transaction is a “simple relationship”.
“The more partners, the more money they raise,” notes Forsage FAQ. To complete the first round of the matrix cycle, the investor must get three referrals in the Forsage scheme, and from there the ladder continues.
The page also provides an example of a user called “ID 8679” who allegedly earns more than $ 700,000 and will soon become a “millionaire”.
However, the Philippines-based Matrix cycler Forsage is considered a Ponzi scam that could be over in no time. Some crypto advocates have speculated about the Forsage project and how it has attracted many ETHs since it was launched.
Primitive Ventures founding partner Dovey Wan recently discussed the Forsage pyramid scheme on Twitter. Wan said much of the vibrancy of the Ethereum network comes from Forsage.
“The minimum price of ETH does not come from some foodcoin scams or from a potential explosion of the defi vault, unfortunately it comes from the liveliness of Forsage, the current version of ETH Plustoken” tweeted. “I just checked out his business which is still thriving, feeling comfortable,” he added.
Edward Morra responded to Wan’s tweet and also shared a graph showing the amount of ETH sent to Forsage since its inception. Morra’s chart shows deposits are slowing, which could mean an exit could be in the cards very soon.
“It’s pretty scary considering the amount of ETH sent has been decreasing for some time,” Morra he wrote. “It means this Ponzi will soon stop working like all Ponzis.”
Additionally, the Forsage scheme continued after the Philippines Securities and Exchange Commission (SEC) issued a warning about Forsage.
“Forsage, which is led by Lado Okhotnikov, is not properly registered with the SEC and is not licensed to solicit, accept or take investments from the public or issue investment contracts and other forms of securities,” the caution notes.
The letter from the SEC highlights:
The active income generated by the compensation plans depends on the number of reports and / or membership fees collected while the passive income is acquired through relapses. Aside from the lack of necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, in which investors are paid using input from new investors, according to the SEC.
In a Medium post written by Badmlm, the writer notes that all Forsage does is offer an Ethereum-based pyramid gift scheme disguised as “crowdfunding”.
“Pay Ethereum to join the ability to refer other fanatics, to get paid Ethereum so they can do the same,” the review details.
“People think it’s all legitimate and some kind of revolutionary way to earn Ethereum every day, because it’s managed with smart contracts on the Ethereum blockchain. Don’t be fooled by all the smoke and mirrors, it’s still an illegal pyramid scheme.” Badmlm concludes.
What do you think of the Forsage pyramid scheme? Let us know what you think about this topic in the comments below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Etherscan, SEC, Edward Morra, Twitter, Dappstats.com
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