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On April 23, 2025, the US Securities and Exchange Commission filed charges against PGI Global founder Ramil Palafox, accusing him of running a large-scale crypto Ponzi scheme that promised users huge profits after investing in Bitcoin and foreign exchange trading.
According to an official statement by the SEC, at least 90,000 people joined the PGI global scheme and forked out at least $198 million before the company collapsed. The founder, Ramil Palafox, is also accused of misappropriating more than $57 million of investor funds, which he allocated to himself.
Used Investor Money to Fund Events
The SEC explains in its statement that PGI Global followed a multi-level marketing structure that encouraged people to introduce new users so they could earn bonuses. According to the SEC, this became a typical “Ponzi-like” setup, where a firm uses new investments to pay earlier participants.
The US regulator elaborates how Palafox staged events in places like Dubai and Las Vegas to attract unsuspecting individuals. The indictment further states that PGI Global used investor monies to fund the events. The charge states further that:
“PGI Global deceived investors by selling ‘membership’ packages from January 2020 to October 2021, promising high returns through cryptocurrency and foreign exchange trading. However, he used over $57 million of investor funds to purchase luxury items such as houses and cars.”
Allure of Guaranteed Profits
The SEC filed a lawsuit against Ramil Palafox in the US District Court for the Eastern District of Virginia and wants the businessman charged for violating the antifraud and registration provisions of the federal securities laws.
The regulator seeks permanent injunctive relief and conduct-based injunctions prohibiting the accused from running a crypto Ponzi scheme that allegedly involves the offer or sale of securities and the offering of crypto assets bought and sold as securities, disgorgement of ill-gotten gains and prejudgment interest, and civil penalties.
According to a statement from Scott Thompson, Associate Director of the SEC’s Philadelphia office:
“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.”
Palafox Faked Crypto Activity
The SEC alleges that instead of giving the promised payouts, Palafox used the funds from investors to lead an extravagant lifestyle consisting of a $1.7 million home in Las Vegas, multiple Lamborghinis, and $1.18 million in Cartier jewelry, among other purchases.
The SEC’s cyber unit explained in their statement that Palafox faked crypto activity through circular transactions by manipulating dashboards to falsely indicate that profits were being made to keep investors hooked. The statement by Laura D’Allaird, chief of the SEC’s Cyber Unit, said:
“His false claims of crypto industry expertise and a supposed AI-powered auto-trading platform were just masking an international securities fraud.”
Conclusion
The indictment of PGI Global founder Ramil Palafox marks the first legal action taken by the SEC under the stewardship of newly sworn-in crypto-friendly chair Paul Atkins.
Earlier in the year, the SEC accused Nova Labs of selling unregistered securities by offering devices that mined the Helium (HNT) token, resulting in a $200,000 civil penalty after the parties reached a settlement.
Frequently Asked Questions
What is the Ponzi rule?
Ponzi schemes are an investment scam in which investors are promised artificially high rates of return with little or no risk.
What are the main elements of a Ponzi scheme?
The elements of Ponzi schemes mostly include three elements: investor deposits, little or no legitimate business operations, and little or no business profits or earnings.
How can you identify Ponzi schemes in crypto?
Ponzi schemes in the cryptocurrency space promise high returns with little to no risk. These schemes often ask for an initial investment in Bitcoin or another cryptocurrency and offer rewards that seem too good to be true.
Appendix: Glossary to Key Terms
Ponzi scheme: A scam where people believe in a non-existent enterprise with the promise of quick returns to the first investors from money invested by later investors.
Indictment: A formal charge or accusation of a serious crime.
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