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What is Forsage Crypto

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The crypto space is home to a lot of protocols and schemes. Each promises to make investors wealthy.

Many of them usually promise a high return on investment, while others might promise a commission for getting new users to register. Cryptocurrency is still a very new investment class and so they are not a lot of regulations on the space. As a result, many protocols and projects have popped up. While it is not news that some of these protocols are fraudulent, it can be hard to spot the difference between the legit ones and the fraudulent ones.

Forsage is a popular smart contract that runs on the Ethereum blockchain. Forsage is a pyramid earning scheme – the first to run on a blockchain.

Forsage was launched on February 20, 2020. It works by getting people to join the program where they’ll be paid a commission if they can get three new signees to invest in the smart contract. Just like regular pyramid schemes, Forsage pays users for the new signees they bring so the platform must continue growing to stay profitable.

Forsage relies on a smart contract for its operations. Forsage is a good example of a decentralized smart contract. Smart contracts are pieces of code that perform specific actions when certain conditions are met. Smart contracts help to keep the activities of a blockchain decentralized since no one controls the smart contracts. Forsage smart contracts pay users for growing the network. Forsage works on some other blockchains including Tron and Binance.

What’s a pyramid scheme?

Pyramid schemes are business platforms that pay users for bringing new users to the platform. Pyramid schemes work by rewarding people for growing the network. The reward paid to early participants is from the money gotten from new participants. Pyramid schemes are illegal in many countries including the U.S.A, Britain, Germany, and many others. Now we understand more about pyramid schemes, let’s look at how Forsage works.

How Does Forsage work?

Forsage uses a system of matrices. Matrices refer to slots that contain individuals signed up by a referrer. There are 3 matrix plans in Forsage: x3, x4, and xGold.

X3

X3 matrices contain 3 slots and 12 levels. Each slot is a space for a newly referred user. When an individual signs up through a referral link, the new user goes into a 3x matrix belonging to the referrer. Signing up as a new user requires paying 0.05 ETH into the smart contract before the registration is complete. Once the amount is paid, the money is split into two and one half is given to the referrer while the other half goes to the network. Forsage allows people to upgrade to new levels in the matrix. Upgrading to a new level costs twice as much as the previous level. Upgrading x3 and x4 matrices can be done independently. However, a person can only activate the levels in a matrix one after the other.

New users are also encouraged to invite others and the same process happens if they successfully get a person to sign up I.e the new users become part of their matrix. New members cannot be registered without a partner ID because the way Forsage works demands that there is always a higher partner in the system. The only account that is allowed to exist without a referral link is the creator of the smart contract. Users who signup without a referral link will be assigned a partner randomly.

Upgrading to new levels within the matrix plans will move a user to the same level of their upper partner structure. For instance,  John activates the levels in a matrix so he can sell contract places to new partners. When the new users join the network and activate other levels in x3 and X4 matrices, the system puts them in a similar position as the referrer’s levels and transfers the rewards for activations higher up in the membership structure.

Xgold:

xGold has 15 levels. The first level costs 0.05 ETH and it doubles up all the way to level 10. After level 10, the values go up following the Golden ratio or the Fibonacci numbers – 1, 2, 3, 5, 8, 13. The cost of levels 10 – 15 include:

Level 10 = 5.5 ETH

Level 11 = 8.9 ETH

Level 12 = 14.4 ETH

Level 13 = 23.3 ETH

Level 14 =37.7 ETH

Level 15 = 61 ETh

xGold matrix has 30 slots arranged in 4 lines. The first line contains 2 slots, the 2nd contains 4 slots, the third contains 8 slots and the fourth contains 16 slots. Partners in this matrix can come from invites or spillovers. Payments from people in the first 2 slots go to the upline- just like the x4 matrix. 20% of each payment in the second slot goes to the user. From the third line, the user gets 30% from each of the eight slots. The fourth line pays 50% from 16 slots. This makes the total yield from the one xGold matrix cycle 1120%.

Forsage has consistently refuted any allegations of being a pyramid scheme. According to Forsage, what makes them stand out is the fact that they don’t make unfulfillable promises to their members. The platform claims that a person’s success depends on that individual. They also claim the platform will remain stable even if it increases by a thousandfold. Forsage also claims that it creates no debts.

According to Forsage, they are a decentralized community and not a pyramid scheme. Forsage claims that, unlike pyramid schemes, there is no large portion of money concentrated in the hands of a few individuals. Forsage also claims that its operations are controlled by no one, rather by a smart contract. As a result, their operations can’t be shut down. Also, they claim each user – whether new or old has the same earning conditions.

Forsage emphasized its decentralization because it claims that pyramid scheme creators can easily close operations – something Forsage can’t do.

Forsage Controversies

While Forsage has claimed to be a decentralized community that helps its members earn money, many people will disagree.

As early as July 2020, the Philippines Securities and Exchanges Commission started suspecting Forsage of being a pyramid scheme.

Although it warned citizens to be careful of the scheme, its warnings fell on deaf ears. People continued to patronize the scheme. A month after the SEC warning, Forsage was recording daily turnovers of $3 million. The firm also downplayed the warning it received from the SEC – even claiming that the SEC had no jurisdiction to issue such warnings.

The SEC, however, claimed that Forsage was a pyramid scheme that paid investors from the amount gotten from new investors. By September, the Philippine authorities slammed Forsage with a cease-and-desist. They revoked Forsage’s operating license making it illegal for Forsage to continue doing business in the Philippines.

A few months later, The Montana commissioner for Securities and Insurance slammed Forsage – claiming that it was a pyramid scheme. Just like they had done earlier, the founders denied the allegations while continuing to promote Forsage in multiple media outlets including Youtube.

The platform’s website also had a section dedicated to explaining why Forsage was not a Ponzi scheme. Soon they were charged to court. Two promoters of the platform, Samuel D Ellis and Sarah L Theissen neither denied nor confirmed the allegations. Rather, they chose an out-of-court settlement. Both defendants also pledged to uphold all federal securities laws.

The controversy looked to blow over until the American SEC charged Forsage to court over fraud charges. 11 members of Forsage were charged to court over allegations that they had illegally raised more than $300 million from retail investors in many countries around the world including the USA. Out of the 11 members charged to court, 4 were founders of the company. Three other U.S based promoters were also charged to court for endorsing Forsage on their media platforms. Several members of a group called Crypto Crusaders were also charged to court for being among the largest promotional group for the pyramid scheme.

Forsage Crypto is a pyramid scheme that runs on a decentralized smart contract that works on Ethereum, Binance, and Tron. Forsage crypto rewards users for getting new users to sign up for the platform.

For every new user that joins the platform, the person that referred them will be given a percentage of their sign-up fee. Forsage crypto claims to be a decentralized crowdfunding platform that’s run by no one. The platform claims to offer equal conditions to all users and also claims to not make unfulfillable promises to its users.

However, closer analysis shows that Forsage is an illegal scheme. The platform has been involved in multiple scandals where it has been accused of running an illegal pyramid scheme in several countries including the Philippines and the US.

The company was recently charged to court over a $300 million revenue it generated from users. The American authorities are claiming that the company knowingly raised $300 million from the investment while knowing that it was running illegal operations. While the case is ongoing, Forsage’s website is still up and running. However, users should stay away from the platform until the fraud allegations settles and we see whether Forsage is allowed to continue operations.

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