By The US Securities and Exchange Commission has filed its first crypto-related case under new Chair Paul Atkins, targeting PGI Global CEO Ramil Palafox for allegedly running a multi-million-dollar crypto Ponzi scheme.
On April 22, the commission formally filed a complaint in the Eastern District of Virginia, accusing Palafox of defrauding over 90,000 investors out of nearly $198 million through a bogus AI-powered cryptocurrency trading platform that boasted an automated trading system.
What is the PGI Global scam?
According to the SEC complaint, between January 2020 and October 2021, Palafox lured investors with promises of guaranteed profits from Bitcoin and forex trading, offering daily returns of up to 200%.
Behind the scenes, however, no trading activity was taking place, and instead, PGI Global operated like a classic Ponzi scheme by using funds from new recruits to pay earlier participants.
The company relied heavily on a multilevel marketing (MLM) model, where investors were incentivised through referral bonuses to recruit others, creating a self-sustaining cycle that lasted until the platform collapsed in 2021; its UK-based operations were shut down by the U.K. High Court the following year.
PGI Global never had the promised “Auto Trading” system and conducted little to no trading at all.
Fake dashboards, circular crypto transactions, and doctored returns were allegedly used to keep investors convinced that their money was growing.
The SEC alleges that Palafox misused over $57 million of investor funds for personal gain by acquiring luxury items and real estate. This included a $1.7 million mansion in Las Vegas, Lamborghinis, and over a million dollars’ worth of Cartier jewellery.
Lavish recruitment events in Dubai and Las Vegas were also part of the act, designed to lure more victims under the guise of a booming business.
Palafox is being charged with violations of anti-fraud and registration rules under federal securities law.
The regulator also wants to bar Palafox permanently from securities and crypto ventures, reclaim investor funds, impose civil fines, and confiscate assets tied to the scheme.
Parallel criminal charges were also filed by the US Attorney’s Office, a part of the US Department of Justice,The SEC and DOJ have filed parallel civil and criminal charges.
On March 13, including wire fraud, money laundering, and unlawful monetary transactions.
Prosecutors claim Palafox misled investors about PGI’s profitability and regulatory standing while hiding the fact that most of their funds were never invested at all.
SEC rolls back crypto enforcement cases
While the commission continues to pursue clear-cut fraud like the PGI Global scheme, its broader stance on crypto enforcement appears to be softening under new leadership.
The case marks the SEC’s first crypto-related action under Chair Paul Atkins, who was sworn in just a day before the filing.
Known for his market-friendly approach during his earlier tenure at the SEC, Atkins’ appointment signals a potential shift away from the hardline regulatory stance taken by his predecessor, Gary Gensler.
Since Gensler’s resignation, the SEC has dropped several high-profile cases against crypto firms, including Consensys, Crypto.com, and MetaMask.
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