Ethereum Boss Vitalik Buterin posted a call on Twitter to other founders to speak up against scammers. However, he added that they should not hold back their voice against fraudsters taking advantage of their platforms.
Buterin said this in response to news of the SEC suing creators of a fraudulent Ponzi scheme based on smart contracts, citing comments he made two years ago against scammers running pyramid schemes on the Ethereum blockchain.
“Call out scammers. You get hate at the moment, but time vindicates you. Even if you’re some CEO with a ‘reputation’ and need for ‘professionalism,’ do it anyway and be savage.”
SEC Charges Eleven Crypto Fraudsters
On August 1, 2022, the U.S SEC charged eleven persons for creating and promoting a fraudulent crypto pyramid scheme called Forsage that raised over $300 million from retail investors worldwide.
The case indicts four founders’ current locations unknown, three U.S-based promoters, and members of Crypto Crusaders, identified as the leading promotional group for the scheme in the United States.
Notably, the project has been operating for over two years, launching in January 2020. Moreover, despite attempts by regulators in the Philippines and Montana to shut down the scheme in their jurisdictions, Forsage continued to operate, denying the news of any regulatory action against it on various social media platforms.
The SEC noted that the Forsage scheme, which operated using smart contracts on Ethereum, Tron, and Binance Smart Chain, required investors to recruit new members to make a profit. “Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.”
Ethereum CEO Backs the Efforts of the SEC
The Security and Exchange Commission is not pulling the brakes in enforcing crypto regulations in the United States. Currently, the commission is suing a former employee of Coinbase and two others in an attempted insider trading scheme. Additionally, Coinbase is under investigation for offering unregistered securities for trading on its platform.
Vitalik insists others speak against scammers to help the community recognise fraud. People listen to influencers, pointing out that they can protect newcomers and investors from falling victims to tricksters.