Largest dApp on Ethereum is singled out by Philippine SEC as possible ponzi

By July 7, 2020DApps
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The Philippine Securities and Exchange Commission (SEC) issued an alert on Forsage and two other entities as suspected Ponzi schemes that work with cryptocurrencies. The aforementioned multilevel system is the dApp with the highest transactions registered in Ethereum, which would be congesting the network.

The regulator highlighted in a release Forsage, RCashOnline and The Saint John are not licensed to operate in the country. The SEC emphasized that its promoters could face fines of 5 million Philippine pesos ($ 100,000) and up to 21-year prison terms.

“In addition to lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, in which investors are paid using the contribution of new investors,” stressed the Commission.

The dApp contract on Ethereum accounts for almost 30% of network transactions at the time of publishing this article, according figures from Eth Gas Station. The number doubles the number of transactions recorded by the Tether USD contract (11.60%).

Considering the last 1,500 blocks on the network, Forsage accounts for almost 30% of transactions. Source: Eth Gas Station

Regarding the use of gas or commissions, Forsage has moved During the last thirty days, 1.5 million dollars equivalent to 6,460 ETH. These figures place it in fourth place among applications on the network.

According to the SEC, Forsage is promoted as an international platform for crowdfunding or a smart contract cryptocurrency program based on Ethereum. In theory, it provides investors with long-term active and passive income through a referral system.

The commission targeted directly at Lado Okhotnikov, one of its co-founders, who defended his project saying that it is the «next generation of platforms for the crowdfunding»Or collective collection.
Okhotnikov said Forsage participants have made more than $ 48 million in profit.

At site from Dapp Stats the scheme is listed as ‘high risk’. According to platform statistics, in the last 24 hours Forsage shows an activity of 4,760 users, which places it first over other services such as Kyber, Compound, IDEX o Uniswap.

Multilevel schemes, based on referral recruitment, are not unknown in the Ethereum network. Some like MMM Global show high network activity to the point of congestion, resulting in higher commissions for blockchain participants.

CryptoNews reported in May this year that the Global MMM related address it had been inundated with more than 1.34 million allegedly worthless transactions. In this case, the operations were marked as pending. A similar situation is occurring with Forsage, but with more than 1.4 million transactions since its inception.

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