SEC ignores Paul Pelosi but charges 11 in alleged $300 million crypto Ponzi scheme
While House Speaker Nancy Pelosi's husband Paul Pelosi makes one trade after another based 'conveniently' on legislation his wife happens to be guiding through Congress at the time, Joe Biden's Security and Exchange Commission is looking the other way.
Instead -- and, admittedly, just as appropriately -- the SEC is taking a dim view of the hacks and scam artists who have been ripping off millions of Americans via cryptocurrency Ponzi schemes.
As reported Monday by CNBC
, the agency has charged 11 people "for their roles in creating and promoting an allegedly fraudulent crypto and Ponzi scheme" that took in more than $300 million from millions of retail investors around the world, including many in the U.S.
The scheme, which was called Forsage, was billed as a decentralized smart contract platform, the outlet reported, which permitted millions of retail investors to make transactions through smart contracts that operated on several blockchains including ethereum, tron, and finance. However, behind the scenes, the SEC alleges that for more than two years the scheme
really operated like your run-of-the-mill pyramid setup whereby investors earned profits by recruiting others to take part.
The SEC said in a statement that Forsage was nothing more than a stereotypical Ponzi system where it allegedly utilized assets from new investors to pay off others who got in sooner.
“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” noted Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit.
“Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains," Welshhans added.
Through its support form, Forsage did not offer any method of contacting the company. Also, the firm made no comment, CNBC
Of the 11 people charged, four of them are founders of Forsage. Where they are located currently is not known, but their last known locations were Russia, the Georgia republic and Indonesia.
In addition, the stock watch agency also charged three U.S.-based promoters who touted Forsage on their social media platforms, though they were not identified by the SEC in its press release.
Forsage was in launched in Jan. 2020, and regulators around the world had tried a couple different times to shut it down since then. Cease-and-desist actions were brought against Forsage first in Sept. of 2020 by the Securities and Exchange Commission of the Philippines, and later, in Mar. 2021, by the Montana Commissioner of Securities and Insurance. Despite this, the defendants allegedly continued to promote the scheme while denying the claims in several YouTube videos and by other means.
Two of the defendants, both of whom did not admit or deny the allegations, agreed to settle the charges, subject to court approval.
As for Paul Pelosi, his most recent 'convenient' trade was the multimillion-dollar purchase of stock in U.S. computer chip maker NVIDIA as Nancy Pelosi and Congress were debating a measure that would provide tens of billions of taxpayer dollars in subsidies for American chip makers as means of moving away from Chinese chips as the two countries appear to be on a military collision course over Taiwan.
Because of all the attention that purchase got, he was forced to sell his shares at a loss, but that hasn't stopped Republicans from vowing to investigate the Pelosis and their perfectly-timed stock trading.
House Minority Leader Kevin McCarthy (R-Calif.), who is likely to become Speaker if the GOP retakes control of the House in November, said that there will be an investigation
into the Pelosis if the GOP is victorious in the midterms.
“I would look all the way through it,” he said of a Democrat proposal to ban stock trading for spouses of Congress members. “What I’ve told everybody is we will come back, and we will not only investigate this, we will come back with a proposal to change the current behavior.”