The Philippine Securities and Exchange Commission (SEC) recommended users of the unauthorized Ethereum-application -Forsage to immediately stop any operations with the company due to signs of a multi-level financial pyramid (MLM), reports Decrypt.
According to the SEC, “Forsage’s so-called smart contract partakes of the nature of securities through an investment contract where investors need not exert any effort other than to invest or place money in its scheme in order to profit.”
In a press release, the regulator demanded the organization headed by Lado Okhotnikov to obtain registration. Positioning itself as “the most fully decentralized matrix marketing project,” and, “the most thought-out marketing of this type.”, Forsage has been widely adopted in the Philippines.
However, the SEC indicates that its creators refused to comply with these requirements. They stated that the program would continue to function due to its decentralized nature, which would render the authorities’ attempts to block it.
According to the Ethereum developers, the Forsage smart contract “can’t be halted.” Even if the regulator blocks the website, the absence of a simple user interface at best will only slow down the use of a project that has the signs of a pyramid.
Forsage users profit by attracting more users to invest in multi-level “slots”. Each slot is twice as expensive as the previous and returns twice as much profit back to the original referrer.
According to DappStats, Forsage is currently the second most popular Ethereum-based Dapp in existence, with 4,341 users, falling into the category of “high-risk” ones. Forsage turnover in 24 hours amounted to 6090 ETH or $ 1.38 million.
According to EthGasStation, Forsage ranks fourth in gas consumption over the past 30 days. According to Dune Analytics, the smart contract of the proposed Ponzi scheme was responsible for the consumption of 11.47% of Ethereum gas over the past 24 hours.
According to Bitinfocharts, over the past six months, the median commission has grown almost sevenfold: from $ 0.0344 to $ 0.231. At the same time, the daily volume of gas used is in the region of historical maximum, exceeding 70 million Gwei.