Commissioner Downing Orders Forsage to Cease and Desist
Forsage Alleged to be a Pyramid and Ponzi Scheme
Helena, Mont.- Commissioner of Securities and Insurance (CSI), Montana State Auditor Troy Downing has ordered Forsage to cease and desist from operating a pyramid scheme in Montana. Forsage, a web-based platform that operates using a cryptocurrency called Ethereum, is believed to be in violation of the Montana Securities Act. CSI has received multiple complaints from Montanans related to Forsage
CSI alleges, “There is no product sold other than positions on the pyramid, and the only way to make money is to recruit more people into the pyramid.” According to the Montana Securities Act, “A pyramid scheme is an investment contract, and an investment contract is a security pursuant to section 30-10-103(24).”
“Forsage does not try to hide the fact they are a pyramid scheme. Members must pay with Ethereum cryptocurrency to the person above them to buy a position on the pyramid. The currency used to buy the position goes directly to the participant above.” Commissioner Downing said, ” To make money, the participant must then recruit three more people. The first two recruits’ money goes to the person who recruited them. The money from the third goes to the participant two steps up in the pyramid. Positions on the matrix double in cost to move up.”
Forsage is based in the Philippines and headed by Lado Okhotnikov. The Forsage website, appropriately branded with a pyramid logo, claims users have “zero risk.” Forsage has not filed with the U.S. Securities and Exchange Commission, CSI, or the Montana Secretary of State Office.
“Every investment carries risk. A claim to the contrary is a significant red flag to walk away and alert our agency. Forsage appears to be a scam. Our agency is asking Montanans to stay away and urge their friends and family to do the same.” Downing continues, “To protect Montanans, I have directed this agency to commit all available resources to hold bad actors accountable.”
The Proposed Agency Action outlines that the Commissioner will impose a fine not to exceed $5,000 for each identifiable violation, a fine not to exceed $20,000 per violation of a vulnerable person, and restitution for financial losses. Forsage and Okhotnikov have 24 days to contest Commissioner Downing’s proposed action.
Complaints against Forsage can be filed with the Montana CSI by calling 406-444-2040 or by visiting CSIMT.gov.
Cryptocurrency scams are on the rise in Montana. Consumers can learn more about spotting these scams and what to if they become a victim by watching this VIDEO with Commissioner Downing and Deputy Securities Commissioner Lynne Egan.
Troy Downing is the Commissioner of Securities and Insurance, Montana State Auditor. Commissioner Downing is a two-tour combat veteran, businessman, and entrepreneur.