Forsage claims itself to be the first ever 100 percent decentralized revolutionary “Smart Contract” technology providing market participants with the ability to directly engage in personal and business transaction.
As per the website it is - “International crowd-funding platform for the new generation and the first in the history the marketing matrix on the smart contract for Ethereum”.
It further tries to establish it’s credibility by claiming:
Whether it’s Legal or Illegal?
An act or action legal in one nation may become illegal in another. This is because legality or illegality is decided on the basis of law of the land, which differs spatially and temporally. Let’s examine Forsage as per Indian laws.
To establish that Forsage is an illegal scheme in India, we must prove that it violates one or more Indian laws. The scheme run by Forsage appears to violate at least the following Indian laws.
Prize Chit and Money Circulation Schemes (Banning) Act, 1978:
An Act to ban the promotion or conduct of prize chits and money circulation schemes and for matters connected therewith or incidental thereto.
Section 2 (c) defines “Money Circulation” schemes as –
Any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions;
Thus, any promise to pay money based on enrolment of members into the scheme, brings the scheme under the ambit of “Prize Chit and Money Circulation Schemes”.
In fact, the enrollment scheme of the company is open ended which means a person who joins as a member in the scheme can join unlimited number of persons to the Scheme. The Company divides them into pairs (one at the left node Forsage x3 and the other at the right node Forsage x4). The person who enrolls new member is understood as the up-line member or sponser. The person whom the member joins is called the down-line member.
The Forsage schemes – Forsage x3 and Forsage x4 pays money (Ethereum) for enrolling members into the scheme.
Section 3 bans prize chit and money circulation schemes and even outlaws participation in these schemes.
Section 3: Banning of prize chits and money circulation schemes or enrolment as members or participation therein: No person shall promote or conduct any prize chit or money circulation scheme, or enroll as a member to any such chit or scheme, or participate in it otherwise, or receive or remit any money in pursuance of such chit or scheme.
Section 5 stipulates penalties for other offences in connection with prize chit and money circulation schemes.
Section 5: Penalty for other offences in connection with prize chits or money circulation schemes:
Whoever, with a view to the promotion or conduct of any prize chit or money circulation scheme in contravention of the provisions of this Act or in connection with any chit or scheme promoted or conducted as aforesaid —
(a) prints or publishes any ticket, coupon or other document for use in the prize chit or money circulation scheme; or
(b) sells or distributes or offers or advertises for sale or distribution, or has in his possession for the purpose of sale or distribution any ticket, coupon or other document for use in the prize chit or money circulation scheme; or
(c) prints, publishes or distributes, or has in his possession for the purpose of publication or distribution —
(i) any advertisement of the prize chit or money circulation scheme; or
(ii) any list, whether complete or not, of members in the prize chit or money circulation scheme; or
(iii) any such matter descriptive of, or otherwise relating to the prize chit or money circulation scheme, as is calculated to act as an inducement to persons to participate in that prize chit or money circulation scheme or any other prize chit or money circulation scheme; or
(d) brings, or invites any person to send, for the purpose of sale or distribution, any ticket, coupon or other document for use in a prize chit or money circulation scheme or any advertisement of such prize chit or money circulation scheme; or
(e) uses any premises, or causes or knowingly permits any premises to be used, for purposes connected with the promotion or conduct of the prize chit or money circulation scheme; or
(f) causes or procures or attempts to procure any person to do any of the above-mentioned acts, shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both:
Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees
Cyber Cops Services Website: services.cyber-cops.com
Therefore, even promotion of such illegal Money Circulation schemes is outlawed as per Indian laws.
Section 10: Offences under this Act to be cognizable: All offences punishable under this Act shall be cognizable.
The Banning of Unregulated Deposits Schemes Act, 2019:
An Act to provide for a comprehensive mechanism to ban the unregulated deposit schemes, other than deposits taken in the ordinary course of business, and to protect the interest of depositors and for matters connected therewith or incidental thereto.
Section 2 (4) defines “deposit” as:
“Deposit” means an amount of money received by way of an advance or loan or in any other form, by any deposit taker with a promise to return whether after a specified period or otherwise, either in cash or in kind or in the form of a specified service, with or without any benefit in the form of interest, bonus, profit or in any other form, but does not include —
(a) amounts received as loan from a scheduled bank or a co-operative bank or any other banking company as defined in section 5 of the Banking Regulation Act, 1949;
(b) amounts received as loan or financial assistance from the Public Financial Institutions notified by the Central Government in consultation with the Reserve Bank of India or any non-banking financial company as defined in clause (f) of section 45-I of the Reserve Bank of India Act, 1934 and is registered with the Reserve Bank of India or any Regional Financial Institutions or insurance companies;
(c) amounts received from the appropriate Government, or any amount received from any other source whose repayment is guaranteed by the appropriate Government, or any amount received from a statutory authority constituted under an Act of Parliament or a State Legislature;
(d) amounts received from foreign Governments, foreign or international banks, multilateral financial institutions, foreign Government owned development financial institutions, foreign export credit collaborators, foreign bodies corporate, foreign citizens, foreign authorities or person resident outside India subject to the provisions of the Foreign Exchange Management Act, 1999 and the rules and regulations made there under;
(e) amounts received by way of contributions towards the capital by partners of any partnership firm or a limited liability partnership;
(f) amounts received by an individual by way of loan from his relatives or amounts received by any firm by way of loan from the relatives of any of its partners;
(g) amounts received as credit by a buyer from a seller on the sale of any property (whether movable or immovable);
(h) amounts received by an asset re-construction company which is registered with the Reserve Bank of India under section 3 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(i) any deposit made under section 34 or an amount accepted by a political party under section 29B of the Representation of the People Act, 1951;
(j) any periodic payment made by the members of the self-help groups operating within such ceilings as may be prescribed by the State Government or Union territory Government;
(k) any other amount collected for such purpose and within such ceilings as may be prescribed by the State Government;
(l) an amount received in the course of, or for the purpose of, business and bearing a genuine connection to such business including —
(i) payment, advance or part payment for the supply or hire of goods or provision of services and is repayable in the event the goods or services are not in fact sold, hired or otherwise provided;
(ii) advance received in connection with consideration of an immovable property under an agreement or arrangement subject to the condition that such advance is adjusted against such immovable property as specified in terms of the agreement or arrangement;
(iii) security or dealership deposited for the performance of the contract for supply of goods or provision of services; or
(iv) an advance under the long-term projects for supply of capital goods except those specified in item (ii): Provided that if the amounts received under items (i) to (iv) become refundable, such amounts shall be deemed to be deposits on the expiry of fifteen days from the date on which they become due for refund: Provided further that where the said amounts become refundable, due to the deposit taker not obtaining necessary permission or approval under the law for the time being in force, wherever required, to deal in the goods or properties or services for which money is taken, such amounts shall be deemed to be deposits.
For the purposes of this clause, —
Section 2 (5) defines “depositor” as:
Any person who makes a deposit under this Act;
Section 2 (6) defines “deposit taker” as:
“deposit taker” means —
(i) a Corporation incorporated under an Act of Parliament or a State Legislature;
(ii) a banking company, a corresponding new bank, the State Bank of India, a subsidiary bank, a regional rural bank, a co-operative bank or a multi-State co-operative bank as defined in the Banking Regulation Act,1949.
Section 3 bans Unregulated Deposit Schemes:
Section 3: Banning of Unregulated Deposit Schemes
On and from the date of commencement of this Act, —
Section 6: Certain scheme to be Unregulated Deposit Scheme
A prize chit or a money circulation scheme banned under the provisions of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978 shall be deemed to be an Unregulated Deposit Scheme under this Act.
Section 21: Punishment for contravention of Section 3
(1) Any deposit taker who solicits deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than two lakh rupees but which may extend to ten lakh rupees.
(2) Any deposit taker who accepts deposits in contravention of section 3 shall be punishable with imprisonment for a term which shall not be less than two years but which may extend to seven years and with fine which shall not be less than three lakh rupees but which may extend to ten lakh rupees.
(3) Any deposit taker who accepts deposits in contravention of section 3 and fraudulently defaults in repayment of such deposits or in rendering any specified service, shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine which shall not be less than five lakh rupees but which may extend to twice the amount of aggregate funds collected from the subscribers, members or participants in the Unregulated Deposit Scheme.
For the purposes of this Act, —
Section 28: Offences to be cognizable and non-bailable
Notwithstanding anything contained in the Code of Criminal Procedure, 1973 every offence punishable under this Act, except the offence under section 22 and section 26, shall be cognizable and non-bailable.
Forsage is not a registered legal entity in India. As such it is an Unregulated Deposit Scheme, therefore, illegal as per aforesaid Indian law.
Besides, the scheme has been collecting money from it’s subscribers without giving any product or service in return. This itself shows that something is not right with the scheme. We exchange money for some good or service in return, which is clearly missing here.
Forsage provides no details or information on its website about who owns or runs the entity Forsage. In fact, Forsage claims that it doesn’t have admin. This is absurd, because someone must have setup the website and profits from it.
Forsage’s website - “forsage.io” has been privately registered on February 9th, 2020 to avoid any analysis by Law Enforcement Authorities or spammers.
Forsage appears to be an illegal Money Circulation scheme operating in India. In fact, owners of Forsage are transparent about the illegal nature of their MLM opportunity.
“Profit comes from other participants directly into your personal wallet”.
Such Money Circulation schemes primarily benefit the masterminds and the top recruiters. Whoever created the scheme shall benefit the most, by means of one or more preloaded admin positions. Top recruiters (those who get in early) receive what’s left, with the majority of the participants ultimately making a loss.
The Philippines’ Securities and Exchange Commission (SEC) has flagged Forsage as a Ponzi scheme, where money from new investors are used to pay "fake profit" to previous investors. Therefore, beware from participating in such illegal schemes!