Philippines’ SEC Declares Top Ethereum-Based DApp a Ponzi

News / 05.07.2020

The Philippines’ Securities and Exchange Commission (SEC) has declared the top Ethereum DApp, Forsage, which accounts for 25 percent of the activity on Ethereum network as a possible Ponzi scheme.

As a major source of activity on the Ethereum network recently, Dune Analytics shows that Forsage smart contract consumed 12.78 percent of Ethereum’s gas within the previous 24 hours.

Forsage, which is behind the increase in ETH transaction fees, claims itself as a fully decentralized matrix marketing project, as well as the most thought-out marketing of this type. Nevertheless, its features are similar to that of a multi-level marketing scheme.

According to DappStats ranking, Forsage is a High-Risk application, as its users need to bring on more users for investment in multi-level slots for them to make profit.

As announced by the Philippines’ SEC, users of Forsage should stop its use immediately. The commission also called on the DApp owner to come for an official registration.

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 engaging in investment-taking activities in the Philippines which is NOT AUTHORIZED by the Commission.”

Nevertheless, in spite of the commission’s call for the DApp’s registration as a licensed security, its operators seem unwilling to comply. The commission noted that the information provided by the operators proved unhelpful to the commission’s efforts.

According to the commission, the operators said the program will keep running even if they shut down its website for any reason. The operators noted that due to the decentralized nature, it is free from authorities and the government cannot shut it down.

After the commission’s announcement, Forsage app continues to run and at press time, the DApp is the most popular DApp based on Ethereum. DappStats data shows that the app had 4,341 users within the previous 24 hours. The sum of money that passed through the DApp within the previous 24 hours was $2.86 million (more than 12,000 ETH).

Source: Cryptopress.

Sudarshan M is a long time crypto-enthusiast. Pulled in by bitcoin early on, it did not take long for Sudarshan to divert all of his academic attention from business studies to blockchain by doing his Masters and eventually pursuing his PhD in the subject.