Takeaways From SEC's Russian Crypto Ponzi Scheme Action

In the 1920s, a new form of investment fraud roared into the markets with the advent of the Ponzi scheme.

Earlier this month, the U.S. Securities and Exchange Commission filed a complaint captioned SEC v. Okhotnikov in the U.S. District Court for the Northern District of Illinois, alleging that 11 crypto founders and promoters used the same illegal money-making tactics employed by Charles Ponzi a century ago.¹

The SEC alleged that the defendants employed a "textbook pyramid and Ponzi scheme," fraudulently raising more than $300 million from millions of retail investors worldwide, in connection with the crypto platform Forsage.

This action continues the wave of aggressive SEC enforcement in the crypto space.