A man named Ramil Palafox is facing serious charges for allegedly running a massive cryptocurrency scam. Federal prosecutors and the SEC say he ripped off around $200 million from nearly 90,000 investors.
How the Scam Worked
Palafox, a US and Philippines citizen, ran a company called PGI Global. He reportedly told investors he had amazing cryptocurrency expertise and a super-smart AI trading platform. He promised huge, guaranteed returns on their investments.
Lavish Lifestyle Funded by Victims
But instead of investing the money, the SEC says Palafox used it to buy himself and his family a ridiculously extravagant lifestyle. Think luxury cars (including a Ferrari, Lamborghinis, and Porsches!), watches, houses, and designer goods. He even threw lavish parties in Dubai and Las Vegas, paying recruiters bonuses to bring in more victims. The money from new investors just went to pay off old investors and fund his lavish lifestyle – a classic Ponzi scheme.
False Promises and High Returns
The indictment against Palafox includes charges of wire fraud, money laundering, and illegal monetary transactions. He allegedly promised investors daily returns of 0.5% to 3% on Bitcoin, claiming his traders could make money regardless of Bitcoin’s price. The reality? Most of the investors’ money was never actually used to trade Bitcoin at all.
A First Under New Leadership
This is the first major cryptocurrency enforcement case since the SEC got a new chairman, Paul Atkins, who’s known for being relatively “crypto-friendly.” The SEC wants Palafox to pay back the stolen money, face hefty fines, and be banned from selling securities and crypto assets permanently. This case follows another recent crypto enforcement action against Nova Labs.