SEC Cracks Down on $198 Million Cryptocurrency Ponzi Scheme
The SEC charges Ramil Palafox with defrauding investors in PGI Global’s $198 million Ponzi scheme and seeks civil fines and restitution.
The US Securities and Exchange Commission (SEC) has charged Ramil Palafox, the founder of the cryptocurrency corporation PGI Global, with organising a vast $198 million Ponzi scheme that defrauded investors worldwide.
Palafox is accused of scamming investors by advertising PGI Global as a reputable crypto asset and foreign exchange trading firm from January 2020 to October 2021.
$198M Ponzi Scheme Exposed
According to the SEC complaint, Palafox advertised “membership” packages that promised substantial returns from PGI Global’s alleged trading operations, as well as multi-level marketing-style referral incentives to attract new investors.
Palafox misused more than $57 million in investor monies for personal needs, including Lamborghinis. The majority of the remaining assets were utilised to pay out returns to previous investors in a conventional Ponzi scam, which collapsed in late 2021.
“As alleged in our complaint, Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading, but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds.” Laura D’Allaird, chief of the SEC’s Cyber and Emerging Technologies Unit, described Palafox’s conduct as utilising the allure of crypto sector innovation to deceive investors and conceal a massive securities fraud.
The SEC’s action, filed in the US District Court for the Eastern District of Virginia, accuses Palafox of violating federal anti-fraud and registration provisions. It wants to prohibit him from participating in multi-level marketing programs, demands the restoration of ill-gotten gains, and imposes civil fines.
Furthermore, the complaint identifies other relief defendants, including BBMR Threshold LLC and persons associated with Palafox, who demand disgorgement of their ill-gotten gains. Palafox is also facing criminal charges, and the US Attorney’s Office for the Eastern District of Virginia has filed a parallel case.
Crackdown in the UK
In 2022, the UK High Court closed down PGI Global’s UK subsidiary for allegedly running a fraudulent scheme that promised investors up to 200% profits. The company claimed to provide successful digital asset investments but failed to deliver on its promises.
Authorities found that PGI Global stole more than $700,000 from consumers, with officials moving $225,000 to personal accounts and spending $11,500 on luxury products. Meanwhile, Palafox allegedly refused to participate in the probe.
Crypto-asset investments are high-risk; you may lose your capital