Philippines SEC Calls Forsage a Pyramid Scheme, Warns Investors
The regulator cannot block the platform due to its decentralized nature.
The Philippines Securities and Exchange Commission (SEC) has warned investors against the Forsage, the top decentralized application (DApp) on Ethreum blockchain, calling it a pyramid scheme.
In a June 30 announcement, the regulator urged the investors from not using the DApp, raising questions on its business model and also ordered the owner to officially register with the watchdog.
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“Based on numerous reports and information gathered by the Commission, the entity operating under the name FORSAGE, headed by LADO OKHOTNIKOV, is found to be engaged in investment-taking activities in the Philippines which is NOT AUTHORIZED by the Commission,” the SEC noted.
Forsage is the highest gas-consuming DApp on Ethreum blockchain, with 25 percent of the total, offering a “fully decentralized matrix marketing project.”
The model of the DApp resembles with classic multi-level marketing (MLM) scheme as users profit by attracting more users to invest in multi-level “slots” – each slot is twice as expensive as the previous, and returns twice as much profit to the original referrer.
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“Forsage’s so-called smart contract partakes of the nature of securities through an investment contract where investors need not exert any effort other than to invest or place money in its scheme in order to profit,” the regulator added.
Cannot block a decentralized platform
Being a decentralized platform, the Filipino authority cannot put an outright ban on the platform, but it can gather transactional data and approach the investors individually – a process that can turn out to be costly and ineffective.
Forsage also points this out in its advertisement to potential investors.
DappStats, a DApp ranking website, also labeled the Ethreum application with “high-risk”.
“The public is advised NOT TO INVEST or STOP INVESTING in any scheme offered by FORSAGE or such other entities engaged in smart contracts, cryptocurrencies, and digital asset trading that are not registered with the Commission and the BSP,” the regulator warned.
Where is the source link in SEC? Do you have? In what way?
Forsage gives higher returns for the Investors. The more the time, one can passively receive the income. That’s for sure.
I am sure this is the same case with Bitcoin before. And look where it is now!
I wish I should have explored cryptocurrencies or digital assets earlier. There is nothing wrong with cryptocurrencies. Just try to read and learn before diving in.
Good Share!
Great Article
If you do your research, you will find that Forsage is not MLM. MLM income stream goes up benefiting mostly the up lines. Forsage allows the members to get income from “spillovers” that can come from an upper line, down line and even sideways! The concept is a first of its kind. Over 1 million members participating in just 10 months. Just saying, do your research. Cryptocurrency, blockchain technology and smart contracts is going to revolutionize how we do business.