SEC Charges Ramil Palafox with $198 Million Cryptocurrency Fraud

The SEC has charged Ramil Palafox with a $198 million crypto scam involving a Ponzi scheme through PGI Global. He misused $57 million for personal expenses instead of investing it. Additionally, Iranian Behrouz Parsarad was indicted for running the dark web marketplace Nemesis, facilitating drug sales and money laundering. These cases reflect a significant US effort to regulate cryptocurrency and combat cybercrime.

The US Securities and Exchange Commission (SEC) has accused Ramil Palafox, a dual citizen of the US and the Philippines, of executing a $198 million cryptocurrency scam. From January 2020 to October 2021, Palafox allegedly operated a Ponzi-style scheme via PGI Global, deceiving numerous investors around the world.

According to the SEC’s release, Palafox raised approximately $198 million by promising high returns from cryptocurrency and foreign exchange trading. However, it is alleged that he misappropriated over $57 million for personal expenses, including luxury items. Scott Thompson from the SEC stated that Palafox lured investors with assurances of substantial profits, while he instead spent their money on cars, watches, and homes.

Additionally, Palafox’s operation employed a multi-level marketing structure and he falsely claimed expertise and the existence of an AI-driven trading platform. The scheme ultimately collapsed in 2021, leading to considerable losses for investors.

The SEC has filed a complaint in the US District Court for the Eastern District of Virginia, charging Palafox with violations of both fraud and registration laws. The SEC seeks a return of the ill-gotten gains, civil penalties, and a permanent injunction to prevent further fraudulent activities. Concurrently, the US Attorney’s Office has instituted criminal charges against Palafox.

In a different case, Iranian national Behrouz Parsarad has been indicted for launching and managing the dark web marketplace Nemesis, which facilitated illegal drug sales, including fentanyl. The US Office of Public Affairs reported that the marketplace also engaged in crimes such as financial data theft and malware distribution, processing over 400,000 orders from 2021 to 2024.

Parsarad faces charges of money laundering, having used cryptocurrency to disguise the proceeds of his illegal activities. The marketplace prohibited transactions in government-backed currencies. If convicted, he faces a mandatory minimum of 10 years in federal prison, with a maximum sentence of life.

Recent cases in the cryptocurrency domain indicate the US government’s heightened commitment to oversee the sector and address cybercrime more thoroughly. Notably, Anurag Pramod Murarka was arrested for laundering over $24 million via the dark web, underscoring this focus on regulatory enforcement.