- Forsage is an Ethereum-based scam that has been running since February 2020
- The pyramid scheme has had a huge network effect which has been disguised by the DeFi surge
- The fallout from the PlusToken scam showed that such schemes can dump the price when they are rumbled
Many know PlusToken as the Bitcoin-grabbing Ponzi scheme that hoarded $5.8 billion worth of cryptocurrency. However, few have heard of Forsage, yet it might be the reason why the Ethereum price is where it is today, and it could presage a huge crash in the Ethereum price in the near future.
Forsage the Ponzi dApp
Forsage is a multi level marketing scheme disguised as an Ethereum dApp. It calls itself a ‘cash gifting scheme’ and a ‘matrix marketing program’ but in reality it is nothing more than a pyramid scheme designed to enrich those at the top at the expense of those underneath.
Forsage launched fairly recently, in February 2020, and used the coronavirus pandemic as a way of attracting more members by advertising it as a means of earning extra money while the economy was suffering and jobs were being lost.
The Forsage website describes it as “the first ever 100% decentralized international crowdfunding” with “zero risk factors”, which in itself should be enough to make you run a mile. Instead, users have been flocking to the ‘platform’, with hundreds of thousands of ETH being ploughed into it each month. This is despite several warnings online, including a formal notice about it from the Philippine Securities and Exchange Commission.
Could the Scam Crash the Ethereum Price?
According to China blockchain expert Dovey Wan the scam has been a top 3 consumer of Ethereum gas for the past four months, as the purchasing and transfer of ETH is the only way to use the platform. It is not known how much ETH Forsage currently hold, but given the levels of activity on the Ethereum network that Forage engenders it can be assumed that they have hundreds of million of ETH in storage, ready to cash out when the music stops.
The busting of the PlusToken ring at the end of July was thought to be instrumental in Bitcoin crashing from $12,000 to $10,550 in a single day, and it isn’t out of the question that once Forsage is stopped, as one day it will be, the same might happen with Ethereum.