FORSAGE is NOT REGISTERED with the Commission and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to solicit, accept or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC). FORSAGE is also NOT REGISTERED either as a crowdfunding intermediary or a funding portal under SEC Memorandum Circular No. 14, Series of 2019 or the Rules and Regulations Governing Crowdfunding.
Date Posted: 30 June 2020
Based on numerous reports andinformation gathered by the Commission,the entityoperating under the nameFORSAGE, headed by LADO OKHOTNIKOV,is found to be engaged in investment-taking activitiesin the Philippineswhich isNOT AUTHORIZED by the Commission.Operators of FORSAGE asserts that its programis designedas a Crowdfunding International Platformora Smart Contract Crypto Earning Programbased on the Ethereum blockchain technologywhich apparentlyprovidesa long-term active and passive income to investors through itscrowdfunding referral systemthat appears to be asecured, scam–free, and inexpensive investmentyet assuring a lucrative return with little or no risk.FORSAGE claims that its program will continue to function even if its website “www.forsage.io”is closed for any reason.It even implied that the Government cannot shut it down because it is decentralizedandthusfree from any authority.As postedonline,FORSAGE offersTwelve (12) investment slot packagesor levels for itsTwo (2) Commission Payout Systemsor Compensation Plansreferredas the“X3”and “X4 Partner income”witha minimum investment of 0.05ETHor at least SixHundred Pesos (Php 600.00)to a maximum of 51.2 ETHor almost Six Hundred Thousand Pesos(Php 600,000.00)depending on the chosen slot/s. To wit:
Notably, each slot is twice more expensive than the previous one and accordingly promises an income or profit which is twice as high as well.As posted:FORSAGE states that each investment slot under the X3 and X4 plans all have endless referral cycles. Therefore, the potential income therefrom seems to be boundless.With regard to X3, each cycle requiresThree (3) referrals. The membership fees from first Two (2) referrals shall be automatically paid to the referring member’s account while the Third referral’s membership feeshall be considered as a “Re-entry fee” to the system which shall then be awarded to the referring member’s sponsor or uplineaccount. To show:Anent the X4, it needs Six (6) referrals to complete the cycle. The membership fees for the first Two (2) referrals shall be automatically awarded to the Sponsor account while the Third untilthe Fifth referral shallbe paid to the referring member’s accountand the Sixth and final referral for the loop shall again be considered as a “re-entry fee”to the system. To illustrate:
In addition, “Spillovers”or overflows of referrals from either the referring member’s sponsor and/or downlines are also permittedin order toassist passive investors to complete their cycles.Basically, theactive income generated from the foregoing compensation plansdepends on the number of referralsand/or membership feesgathered while passive income isacquired throughspillovers.Hence, the more people that willbe referredto FORSAGE’s system, the more likely thatitsmemberswill earnincometheretoeither actively or passivelywhich ultimately defeats itsclaim of sustainability because its wholesystem depends entirely on the new investors that will be lured in.Based on the foregoing, FORSAGE’sso-called smart contractpartakes of the nature of securities through an investment contract wheretheir investors need not exert any effort other than to invest or place money inits schemein order to earnprofit.Briefly, an “investment contract”exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of otherswhich prominent on FORSAGE’s scheme.Therefore, FORSAGEmust be duly registered with the Commission and that any person or entity intending to offer and sell itsinvestment contractare required to secure the necessary registration and/or licensefrom the Commission as well.However, per our record, FORSAGEis NOT REGISTEREDwith the Commissionand OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITYto solicit, accept or take investments/placements fromthe public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC).FORSAGEis also NOT REGISTEREDeither as a crowdfunding intermediary ora funding portal under SEC Memorandum Circular No. 14, Series of 2019 or the Rules and Regulations Governing Crowdfunding. Likewise, its name DOESNOT APPEARamong the registered banks, exchanges or companies engaged in digital assets with the Bangko Sentral ng Pilipinas (BSP) in accordancewith the GUIDELINES FOR VIRTUAL CURRENCY EXCHANGES (BSP CIRCULAR NO. 944) which requires all entities engaged in Virtual Currencies in the Philippinesto obtain a Certificate of Registration to operate as remittance and transfer company pursuant to the BSP rules and regulations.
Moreover, the said scheme employed by FORSAGE clearly shows indication of a possible Ponzi Scheme where monies from new investors are used inpaying“fakeprofits” to priorinvestorsand is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent membersin case of scarcity of new investors.Hence, thepublic is advisedNOT TO INVEST or STOP INVESTING in any scheme offered by FORSAGEor such other entities engaged insmart contracts,cryptocurrencies and digital asset trading that are not registered with the Commission and the BSP.The public is again remindedthat investing in such an unregulated entity lacks investor protectionbecause it isnot covered by prudential and market conduct requirements applicable to licensed and authorized operations.Accordingly, the Commission warns all unscrupulous individuals and/or entities that strict penalties are imposed for violations ofthe Securities Regulation Code, the Revised Corporation Code, and such other rules and regulation enforced by the Commission.Those who act as salesmen, brokers, dealers or agents ofsuch unauthorized entitieslike the operators of the FB Page FORSAGE PHILIPPINESand FORSAGE SMART CONTRACTSin selling or convincing people to invest in theirinvestment scheme offeredincluding solicitations and recruitment through the internet may likewise be criminally prosecutedand penalized with a maximum fine of Five Million pesos (P5,000,000.00) or a penalty of Twenty-one (21) years of imprisonment or both pursuant to Sections 28 and73 of the SRC. In the same manner, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the publicsimilar to CHRISTOPHER DOROLIATand the operators of the FORSAGE PHand THINK WISE CHANNEL, may incur criminally liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of SECvs. Oudine Santos(G.R. No. 195542, 19 March 2014).The names of all those involved will also be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be assessedcorrespondingly.Apart thereof, the Bayanihan to Heal as One Act(Republic Act No. 11469) also punishes those participating in cyber incidents that make use or take advantage of the current crisis situation to prey on the public through scams, phishing, fraudulent emails, or other similar actsduring the term of its effectivity.Again, it must be noted that the above laws are not aimed to hinder or pose significant risk to businesses and cryptocurrency projects but are intended for the protection of both the registered entities and the investing public from any anomalies and/or irregularities which tend to result from any unlawful or unauthorized operations.Should you have any information regarding any investment solicitation activity by any individual or group of individuals representing FORSAGE, please send your report to the EIPD at email@example.com.For the guidance of the public. Pasay City, 30June2020