TL;DR
- The SEC accuses Ramil Palafox of running a $198 million Ponzi scheme through his company PGI Global, falsely promising high returns from crypto and forex investments.
- An estimated $57 million was allegedly used for personal luxuries, including expensive cars, homes, and watches.
- The scam relied on a multi-level marketing system and fake claims of AI-driven platforms, collapsing in 2021 and affecting thousands of victims.
For nearly two years, Ramil Palafox, a dual U.S.-Philippine citizen, operated one of the largest recent scams in the crypto space, raising close to $200 million by promising guaranteed profits from cryptocurrency and foreign exchange trading. Through his company PGI Global, he deceived thousands of investors both in the United States and abroad, using classic multi-level marketing tactics and technical jargon about AI-powered platforms. It all turned out to be a well-structured facade that used buzzwords to create a false sense of legitimacy among unaware victims.
Personal Spending of Funds Deceives Thousands of Investors
According to the SEC’s complaint, at least $57 million was diverted for personal use, including the purchase of luxury real estate, high-end watches, and premium cars. Meanwhile, the supposed investment systems never actually engaged in legitimate cryptocurrency trading.
“Palafox sold dreams with fake technology while emptying the wallets of those who trusted him,”
said Scott Thompson, Associate Director of the SEC’s Philadelphia Regional Office.
The strategy relied on constantly recruiting new participants who would bring in fresh capital, which temporarily supported payouts to earlier investors, an old but effective Ponzi tactic. The illusion lasted until 2021, when the scheme inevitably collapsed and left behind massive losses. The lack of immediate oversight allowed the fraud to expand much longer than many would have anticipated or imagined possible in today’s digital economy.
Government Strengthens Oversight but Acknowledges Crypto’s Value
These kinds of cases do not represent a failure of cryptocurrencies themselves, but rather the unethical behavior of a few bad actors. The crypto ecosystem continues to evolve, and the transparency of blockchain technology is actually helping to identify and stop fraud faster than traditional systems. Regulators like the SEC are stepping up enforcement but are also beginning to recognize that financial innovation cannot be stifled due to isolated misconduct.
Meanwhile, U.S. authorities have also charged “Behrouz Parsarad” with operating an illegal dark web marketplace that used cryptocurrency to facilitate the sale of drugs and criminal services. These cases reinforce a key message: regulation is advancing, but blockchain remains a vital tool in the fight against financial crime.
