Ramil Palafox has been charged by federal authorities with running a $200 million cryptocurrency fraud, impacting 90,000 investors. The SEC alleges he falsely promised high returns and misused investor funds for personal luxury purchases. This case marks a significant action under the SEC’s new chair, Paul Atkins, with severe penalties sought against Palafox.
Federal authorities have charged Ramil Palafox, a dual citizen of the US and the Philippines, with orchestrating a significant cryptocurrency fraud, allegedly defrauding 90,000 investors out of $200 million. According to charges filed on April 22, Palafox’s company, PGI Global, is accused of misappropriating more than $57 million between January 2020 and October 2021.
The Securities and Exchange Commission (SEC) claims Palafox misled investors by claiming expertise in cryptocurrency and the use of an AI-driven trading platform. Instead of trading, he is alleged to have used investor funds to buy luxury items such as vehicles and watches, while promising high returns through sophisticated trading.
Court documents reveal that Palafox could lose over $1 million in cash and a collection of 17 luxury vehicles, including prominent brands such as Tesla, Ferrari, Lamborghini, and Porsche, should he be convicted. Additionally, lavish recruitment events in Dubai and Las Vegas were reportedly used to entice new investors, with generous bonuses for referrals.
Palafox allegedly guaranteed daily returns of 0.5% to 3% from Bitcoin trading, claiming profitability regardless of Bitcoin’s price movement. However, investigations have indicated that most funds were not invested in Bitcoin transactions, leading many individuals to lose substantial amounts.
This case marks the first major cryptocurrency enforcement action under the new SEC chairman, Paul Atkins, who took over on April 22 and is noted for a more accommodating approach to the crypto sector. The SEC seeks various penalties against Palafox, including a prohibition from selling securities and crypto assets, restitution, and civil fines. Recently, another case against Nova Labs concluded with a $200,000 civil penalty over unregistered securities related to Helium token mining.
