A month later, Forsage continues despite warnings from authorities

One month after the Philippine Securities and Exchange Commission selected Forsage as a likely Ponzi, still the second most popular Ethereum DApp in internet rankings.

Until August 6th Forsage has 390,000 users and revenue of $ 3.11 million per 24 hours, despite being rated “high risk” on’s rankings..

Miguel Cuneta, co-founder of the Philippine fintech Satoshi Citadel Industries, wrote in an interview with Cointelegraph in July – weeks after the official warning from the Philippine authorities:

“I’ve had numerous inquiries from friends and family about research and ‘investing’ in Ethereum over the past month. People post screenshots of their wallets that can turn a small amount of money into a big one in a short amount of time.”

A month later, Forsage continues despite warnings from authorities
A month later, Forsage continues despite warnings from authorities

“”It is the usual and current Ponzi scheme that Ethereum uses, or in the case of the previous ones that have already been caught, Bitcoin as the “product” they sell“said Cuneta.

“”Pay with by paying X amount of money and then do nothing and earn money at ETH. If you want to make more, recruit three people and have them do the same. They are taking advantage of the rising prices of BTC and ETH to show that the investment is really profitable. It’s the same formula every time. Unfortunately, people are desperate to earn extra income in this pandemic crisis, and they are more likely to fall for these programs.“said.

Forsage’s tactics for the pandemic

In a recruiting post that was still online at the time of publication, the author is taking advantage of the pandemic crisis to present Forsage as a smart cryptocurrency income program for contracts allows you to “work from home” which gives investors the opportunity to “earn long term residual income” by simply hiring three more.

The publication attributes the alleged reliability of the program to the inherent properties of smart contracts and cites their automated and “almost unbreakable and immutable” properties..

This supposedly means “that no human being shall disturb or impede the intended flow of the prescribed process, be it through malicious intent or incompetence.”

In order to, Blockchain technology seems to be used to enable trustworthy and decentralized interactionsto give an innovative look to the oldest and most aggressive forms of investment attraction plans.

Cuneta said he believed “Most of these people involved in promoting the program” do not know that it is a Ponzi program and are victims too. “

Looking for a heavy sentence

Victim or not, authorities in the Philippines told Cointelegraph that one of the “Forsage members and / or agents who, despite our predominant advice, continue to actively offer, support, sell, and recruit others to join any such illegal system will be treated accordingly“.

Oliver Leonardo, investor protection and enforcement officer for the Philippine SEC, told Cointelegraph: “We are in the process of collecting information about these representatives in order to formally file a complaint“.

In the Commission’s view, there is no uncertainty as to whether or not Forsage is in breach of national securities laws:

“The Forsage Plan is involved in the nature of the securities through an investment contract that is entirely the responsibility of the SRC [Código de Regulación de Valores]. In this case, the fact that it is decentralized or foreign in nature, as indicated by FORSAGE and its members, does not necessarily mean that its activities do not fall within the remit of the Commission, considering that they are investments. in our country “.

Activities or positions aimed at attracting others to participate in a program or investing money are considered a public investment offering that requires prior registration with the Philippine SEC, Leonardo wrote.

So, Any person or organization using Forsage as an “income generating tool” within the country is regulated by the SEC and is subject to tax as well as other applicable laws, particularly the Central Bank of the Philippines’ Circular of 2017 which contains the guidelines for virtual currency exchange.

The circular is intended to provide a solid framework for regulating the sale or offer of securities, “on a limited scale, to raise capital and resources for local micro, small and medium-sized enterprises”.

Forsage what “seems to offer perpetual or unlimited value through your smart contract or program, certainly not exempt“According to the central bank circular, Leonardo said.

According to Filipino law A maximum fine of 5 million pesos (US $ 100,000) or a 21-year prison term can be imposed – or both – to anyone acting as a seller, broker, agent, or agent for any company involved in unauthorized investment schemes.

“Just a ‘decentralized’ financial fraud”

While it appears that the securities offering will at least require Forsage to register, the Commission has further characterized the program.

“”With that in mind, we want to make it clear that Forsage is nothing more than a “decentralized” financial scam that depends solely on new investments that its reference system attracts for its continued operation.“Leonardo wrote.

Within what Cuneta described as the “very proactive regulatory environment” for the country’s cryptocurrencies, the SEC has followed the central bank’s regulatory framework and issued draft regulations for the offering of digital assets and tokens, as well as proposed regulations for the country’s digital asset exchange.

The Commission has taken several measures over the past few years to warn the investing public about cryptocurrency fraud. It has also issued cease and desist orders and worked with the Philippine National Police to issue arrest warrants against leaders of similar operations.

Despite these precedents and what appeared to be a comprehensive deterrent, Cuneta found that the public health crisis has exacerbated the existing problems with enforcing law enforcement on blockchain fraud:

“The point is, besides being allegedly a decentralized platform, the pandemic does not facilitate the application of physical measures. Much movement has been put on hold as the pandemic is a priority on all fronts.”

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