The Philippines Securities and Exchanges Commission (SEC) has ordered the immediate closure of Forsage and Forsage Philippines, which has been exposed as a scam in recent months.
Forsage touts itself to be a next-generation crowdfunding platform, promising its investors zero risk which it says is guaranteed by the execution of smart contracts. It claims to provide investors with active and passive income through a crowdfunding referral system. The minimum investment is 0.05 ETH ($17), with the maximum investment capped at 51.2 ETH ($17,755).
However, according to the SEC, Forsage is nothing more than a digital currency Ponzi scheme. The regulator ordered the company to cease and desist from soliciting investments in the Philippines. It also ordered the company to cease its Internet presence.
The watchdog said in its notice, “The SEC further ordered Forsage to refrain from transacting any business involving funds in its depository banks, and from transferring, disposing, or conveying in any manner all related assets to ensure the preservation of the assets of the investors.”
This isn’t the first time the Philippines securities regulator has warned against Forsage. In July, it issued a warning against Forsage and other online scams that were targeting the Philippines. In its warning, it stated that Forsage “resembles a Ponzi scheme where investors are paid using the contribution of other investors.”
However, as the regulator noted on the new order, Forsage continued to operate even after the warning. In the month following the SEC warning, Forsage had a daily turnover of over $3 million, according to dappstat.com. Additionally, the firm downplayed the SEC’s warning, claiming that since it was decentralized, it was not under the Commission’s jurisdiction.
While issuing the cease and desist order, the regulator claimed that Forsage has been operating as a broker dealer of securities without being registered with the Commission. Forsage is also not qualified to operate as a crowd funding entity as it’s not duly organized under Philippine laws. In addition, the company is not registered as a virtual currency service provider with the Bangko Sentral ng Pilipinas (BSP).
The SEC warned the public against investing in any scheme offered by Forsage and any other similar entity touting investment opportunities in digital currencies.
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