The U.S. Securities and Exchange Commission (SEC) has charged Ramil Palafox, a dual U.S.-Philippines citizen, with organizing a $198 million cryptoasset fraud.
From January 2020 to October 2021, Palafox operated a Ponzi scheme through his company, PGI Global, defrauding multiple investors.
SEC Suppresses Large-Scale Cryptoasset Fraud
According to the press release, the regulatory agency stated that Palafox raised approximately $198 million from global investors. He promised them significant profits from cryptoasset and foreign exchange trading.
However, the SEC alleges that Palafox misappropriated over $57 million of these funds for personal purchases.
"As alleged in our complaint, Palafox lured investors with the appeal of guaranteed profits from complex cryptoasset and foreign exchange trading, but instead of trading, Palafox bought cars, watches, and houses for himself and his family with millions of dollars from investor funds," said Scott Thompson, Deputy Director of the SEC's Philadelphia Regional Office.
Moreover, the company operated under a multi-level marketing (MLM) structure. Palafox attracted investors by claiming expertise in the cryptoasset field and offering an AI-based trading platform. However, both of these claims were found to be fraudulent.
The scheme ultimately collapsed in 2021, resulting in significant financial losses for investors.
"The SEC's complaint, filed in the Eastern District of Virginia, charges Palafox with violating anti-fraud and registration provisions of federal securities laws," the press release stated.
The SEC is requesting Palafox to return improper profits and pay civil penalties. The regulatory agency has also requested a permanent ban to prevent Palafox from participating in similar activities in the future. Additionally, the U.S. Attorney's Office has filed a criminal lawsuit.
Iranian Citizen Charged with Operating Dark Web Marketplace
Meanwhile, in a separate case, a federal grand jury has charged Iranian citizen Behrouz Parsarad for founding and operating a dark web marketplace. According to the U.S. Attorney's Office, the Nemesis market facilitated illegal drug sales, including fentanyl and other controlled substances. The market also engaged in criminal activities such as financial data theft and malware distribution.
From 2021 to 2024, Nemesis processed over 400,000 orders. In addition to drug sales, Parsarad is also charged with money laundering for using cryptoassets to conceal profits from illegal activities.
"Nemesis users were not permitted to transact using official, government-backed currencies," the press release read.
The accused currently faces a minimum of 10 years in federal prison, with a maximum sentence of life if convicted.
Previously, BeInCrypto highlighted that the FBI arrested Anurag Pramod Murarka for laundering over $24 million using the dark web. These cases emphasize the U.S. government's increasing focus on regulating the cryptoasset sector and combating cybercrime.
