Ramil Palafox has been charged by the SEC and federal prosecutors for a $200 million crypto fraud impacting around 90,000 investors. Alleged misappropriation of $57 million for luxury purchases is highlighted, alongside claims of false guarantees of profits. The scheme, described as Ponzi-like, collapsed in 2021. The SEC seeks penalties and the recovery of ill-gotten gains. Palafox faces parallel criminal charges including wire fraud.
The SEC and federal prosecutors have charged Ramil Palafox in a $200 million cryptocurrency fraud impacting 90,000 investors. This case, which was announced on 22nd April 2025, marks a significant development under the new SEC chair, Paul Atkins. Allegedly, Palafox operated a Ponzi-like scheme via PGI Global from January 2020 to October 2021, promising unrealistic returns from cryptocurrency and forex trading.
According to the SEC, Palafox, who holds dual citizenship in the USA and the Philippines, misappropriated over $57 million in investor funds. His scheme employed a multilevel marketing approach, enticing participants with exaggerated claims of expertise in the crypto space and an illusion of an AI-driven auto-trading system. This ultimately resulted in substantial investor losses when the operation collapsed in late 2021.
Palafox’s recruitment strategy included lavish events in Dubai and Las Vegas, where potential investors were persuaded with referral bonuses, enhancing the scheme’s rapid growth through a pyramid-like structure. SEC Associate Director Scott Thompson indicated that instead of engaging in genuine trading, investor funds were diverted towards Palafox’s extravagant lifestyle.
The scheme promised daily returns between 0.5% and 3% from Bitcoin trading, with claims that profits could be made regardless of market conditions. Federal prosecutors assert that most of the funds were not utilised for actual trading, leading to the eventual downfall that caused many investors to lose significant amounts.
Court documents outline luxury expenditures attributed to the fraud, including high-end vehicles. If convicted, Palafox faces forfeiture of substantial assets, including over $1 million in cash and a collection of luxury cars, notably two Teslas, a Ferrari, and a Lamborghini.
The SEC is pursuing various penalties against Palafox, including a permanent ban from selling securities and the recovery of illicit gains. Concurrently, the U.S. Attorney’s Office has charged him with wire fraud and money laundering, with these allegations having been recently unsealed. The case also names relief defendants associated with the scheme, with the SEC seeking recovery of their alleged fraudulent earnings.
This case underscores the increasing regulatory attention in the cryptocurrency sector, facilitated by collaboration among multiple agencies, including the SEC, FBI, and IRS. Investors are encouraged to access resources to better identify and avoid potentially fraudulent pyramid schemes.
