Cryptocurrency company PGI Global stole $ 198 million from digital asset owners around the world

The U.S. Securities and Exchange Commission (SEC) has filed charges against Ramil Palafox, the founder of PGI Global, for organizing a large-scale fraud scheme worth $ 198 million. According to the SEC’s press release, PGI Global positioned itself as a platform for trading cryptocurrencies and the foreign exchange market, but in fact operated as a classic pyramid scheme.

From January 2020 to October 2021, Palafox offered investors so-called «membership packages» with the promise of super profits. In addition, he encouraged them to recruit new members through a referral reward system similar to multi-level marketing. This allowed him to build a network of thousands of members around the world.

The investigation revealed that Palafox spent at least $ 57 million of the investors' funds on personal needs: purchasing luxury cars, expensive jewelry, designer clothes, and real estate. The rest of the funds were used to pay previous investors, simulating investment returns, which finally led to the collapse of the scheme in 2021.

The SEC representatives emphasized that Palafox misled investors by telling them about the use of advanced artificial intelligence technologies for trading crypto assets, although no trading activity was actually carried out. As a result, he was charged with securities law violations and fraud.

The Commission is demanding a lifetime ban on business activities, the return of illegally obtained funds and the payment of civil fines. At the same time, Palafox is involved in a criminal case filed by the federal prosecutor’s office in the Eastern District of Virginia.

This case is another signal that regulators are stepping up their fight against cryptocurrency fraud. Schemes like PGI Global will be prosecuted in the same way as financial crimes in the traditional banking sector.