The Securities and Exchange Commission (SEC) in the United States has brought charges against Ramil Palafox, a citizen of both the United States and the Philippines, for allegedly masterminding a $198 million cryptocurrency scam.
Palafox is accused of running a Ponzi-style scheme through his company, PGI Global, from January 2020 to October 2021, deceiving numerous investors.
Reportedly, Palafox managed to collect $198 million from investors worldwide by promising them significant returns from cryptocurrency and foreign exchange trading. However, the SEC claims that Palafox misappropriated over $57 million of these funds for personal expenses.
According to the SEC's Philadelphia Regional Office Associate Director Scott Thompson, Palafox lured investors with promises of guaranteed profits from advanced cryptocurrency trading but instead used the money for lavish personal purchases like cars, watches, and homes.
The company operated using a multi-level marketing (MLM) structure, with Palafox attracting investors by claiming expertise in the cryptocurrency industry and offering an AI-driven trading platform. These claims were later found to be fraudulent.
The scam collapsed in 2021, causing significant financial losses for the investors. The SEC has filed a complaint against Palafox in the US District Court for the Eastern District of Virginia, accusing him of violating federal securities laws related to fraud and registration. The SEC is seeking the return of illicit gains, imposing civil penalties, obtaining a permanent injunction against Palafox engaging in such activities in the future, in addition to criminal charges filed by the US Attorney’s Office.
In another case, an Iranian national named Behrouz Parsarad has been indicted by a federal jury for establishing and operating a dark web marketplace called Nemesis. This marketplace facilitated the illegal sale of drugs, including fentanyl and other controlled substances, along with engaging in criminal activities like data theft and malware distribution.
The Nemesis market processed over 400,000 orders between 2021 and 2024 and Parsarad is also facing money laundering charges for using cryptocurrency to hide the proceeds of his illegal operations. Users of Nemesis were restricted from conducting transactions with official currencies.
If convicted, Parsarad could face a mandatory minimum prison sentence of 10 years, with the possibility of a life sentence.
The cases of Palafox and Parsarad underscore the US government's growing efforts to regulate the cryptocurrency market and combat cybercrime, as highlighted by recent arrests such as that of Anurag Pramod Murarka for laundering $24 million through the dark web.