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SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

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Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#31

Post by echelon »

gtvwill wrote: post #27
dannyw wrote: post #22

Earlier quoted context omitted.

If it's actually on chain as a smart contract, it can't be shut down unless the code was written to allow it.

You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? Just cus it lives as code doesn't mean someone or some group isn't responsible for distributing it.

> You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested?

And there goes the blockchain.

I'm shocked it hasn't happened already given the fact that many popular blockchains allegedly host illegal images in the transaction metadata. That's all the FBI needs.

The only reason I can imagine is that blockchain and crypto are still useful to people in certain positions. Exfiltrating money from foreign regimes, etc.

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#32

Post by humaniania »

dannyw wrote: post #22
gregdoesit wrote: post #2

> “ Despite cease-and-desist actions against Forsage for operating as a fraud in September 2020 by the Securities and Exchange Commission of the Philippines and in March 2021 by the Montana Commissioner of Securities and Insurance, the defendants allegedly continued to promote the scheme while denying the claims in several YouTube videos and by other means.” Even now, the site Forsage.io is live, and claims that 2,55…

If it's actually on chain as a smart contract, it can't be shut down unless the code was written to allow it.

You think blockchain is immune to DDoS?

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#33

Post by hnthrow1010 »

echelon wrote: post #31
gtvwill wrote: post #27

Earlier quoted context omitted.

You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? Just cus it lives as code doesn't mean someone or some group isn't responsible for distributing it.

> You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? And there goes the blockchain. I'm shocked it hasn't happened already given the fact that many popular blockchains allegedly host illegal images in the transaction metadata. That's all the FBI needs. The only reason I can imagine is that blockchain and crypto are still useful to people…

>Exfiltrating money from foreign regimes, etc.

Crypto isn't useful for that. The thing that's actually useful for that is the illegal, unregulated exchange that's making the trade. It doesn't matter what currency they trade it for, it could be anything else besides crypto tokens. Crypto actually just adds extra unnecessary steps because the end goal is almost always to get it back out in another local currency. Unless you plan to get the money and then only spend it on NFTs.

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#34

Post by arealaccount »

threeseed wrote: post #25
paranoidrobot wrote: post #8

I mean, it's some progress, I guess. How long until the US Gov goes after all the folks who keep doing pump & dump/"rug pull" b.s with new coins? There seems to be a never-ending trail of those.

They really should start with the celebrities and influencers e.g. Jake Paul who have been profiting by promoting these rug pull schemes to their audiences. At least it would help set a public example for others.

Or the NFL for that matter. Lotta innocent people lost money thinking they been advertised legitimate companies.

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#35

Post by z9znz »

Interesting that I had not even heard of this. My previous client was connected to the types of people who were constantly relaying garbage like this, and unfortunately he would pass most of them to me for review. Almost always I would have to explain that they were almost certainly scams or utterly foolish nonsense ventures. (Usually they were intentionally malfeasant, not naive foolishness.)

The one that blew my mind was Nasgo, a nonsense fake "mining" system which was clearly trying to confuse people with Nasdaq. A few years ago they put on massive performances and hosted hundreds of guests. It was obvious to anyone who was not a greedy non-technical fool that it was a scam, but greed really does something to people. You just could not tell people the problems of this thing, because their ears were closed. So looking now, I see in 2019 the coin was theoretically worth 98 cents. Now it is worth about 1/10th of a cent. It was an outright scam of grand scale, with fireworks and conventions and such, and the people who created it surely made off with millions.

I would guess that there are at least 10 or more similar stories for each year or two. There was the most famous Onecoin and so many that followed.

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#36

Post by brasic »

TedDoesntTalk wrote: post #21
flatiron wrote: post #16

Earlier quoted context omitted.

I’m not educated on crypto but wouldn’t it be easier to go after the fiat->coin people or do people really just mine / buy coin with cash?

What crime are the fiat->coin exchanges committing? (Excluding the insider trading of one individual at coinbase)

To add some nuance to the sibling reply, the SEC has extensively laid out its legal argument for why many (not all) of the coins traded on crypto exchanges are securities under US law, including specific examples. See the recent insider trading complaint [1] and this analysis [2]. Dealing in unregistered securities is a crime [3], so if the analysis is correct then the exchanges are breaking US law.

[1] https://www.sec.gov/litigation/complaints/2022/comp-pr2022-1... (¶ 95 - ¶ 206)

[2] https://www.sec.gov/corpfin/framework-investment-contract-an...

[3] https://www.law.cornell.edu/uscode/text/15/78l

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#37

Post by latchkey »

z9znz wrote: post #35

Interesting that I had not even heard of this. My previous client was connected to the types of people who were constantly relaying garbage like this, and unfortunately he would pass most of them to me for review. Almost always I would have to explain that they were almost certainly scams or utterly foolish nonsense ventures. (Usually they were intentionally malfeasant, not naive foolishness.) The one that blew my mi…

Speaking of mining scams... Envion [1] was a good one too. Amazingly, it still even has updates! [2]

[1] https://www.yahoo.com/news/envion-ico-scandal-both-sides-151...

[2] https://www.envion-konkurs.ch/en/

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#38

Post by tpetry »

dannyw wrote: post #22
gregdoesit wrote: post #2

> “ Despite cease-and-desist actions against Forsage for operating as a fraud in September 2020 by the Securities and Exchange Commission of the Philippines and in March 2021 by the Montana Commissioner of Securities and Insurance, the defendants allegedly continued to promote the scheme while denying the claims in several YouTube videos and by other means.” Even now, the site Forsage.io is live, and claims that 2,55…

If it's actually on chain as a smart contract, it can't be shut down unless the code was written to allow it.

Being on chain doesn‘t have an impact if it still needs centralised architecture like DnS and a webserver with a static ip. It‘s no problem taking them down if it would be legal to do so. But I don‘t know why its not legal to simply cut them off.

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#39

Post by survirtual »

echelon wrote: post #31
gtvwill wrote: post #27

Earlier quoted context omitted.

You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? Just cus it lives as code doesn't mean someone or some group isn't responsible for distributing it.

> You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? And there goes the blockchain. I'm shocked it hasn't happened already given the fact that many popular blockchains allegedly host illegal images in the transaction metadata. That's all the FBI needs. The only reason I can imagine is that blockchain and crypto are still useful to people…

If you ban something that can’t be banned and, surprise, people keep using the unbannable thing, it makes you look very very weak as a governance org.

That perception of weakness is significantly more costly than the existence of the target, especially when you can just control human minds via saying things like “look at how much energy it uses and it does nothing at all!” — and most people will believe it!

Re: SEC Charges Eleven Individuals in $300M Crypto Pyramid Scheme

#40

Post by survirtual »

gtvwill wrote: post #27
dannyw wrote: post #22

Earlier quoted context omitted.

If it's actually on chain as a smart contract, it can't be shut down unless the code was written to allow it.

You could make hosting and distribution of the code a prohibited act. Wanna still host that Blockchain if it can get you arrested? Just cus it lives as code doesn't mean someone or some group isn't responsible for distributing it.

On another note, restricting code like this is a terrible precedent. I believe code is part of free speech, but in many respects, even more sacred — like mathematics.
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