The SEC charged the founder of PGI Global with a Ponzi scheme involving cryptocurrency totaling over $198 million.

The US Securities and Exchange Commission (SEC) has accused Ramiro Ventura Palafox of cryptocurrency fraud that resulted in $198 million in losses for investors. In an official announcement, the agency stated that Palafox misappropriated $57 million from the funds.
According to the SEC, Palafox, who is a citizen of both the US and the Philippines, launched PGI Global. He claimed it was a cryptocurrency and forex trading company and charged users a membership fee from January 2020 to October 2021, promising investors guaranteed high returns.
However, the investment was a Ponzi scheme, with most of the collected funds spent on paying other investors, while the rest was spent on luxury cars, real estate, and other items. Palafox managed the scheme until its collapse at the end of 2021.
Commenting on the incident, the head of the cyber and new technologies unit, Laura D'Allaird, said that Palafox deceived investors by promising innovative trading methods.
D'Allaird said:
"His false statements about the expertise in the cryptocurrency industry and the alleged automated trading platform based on artificial intelligence only masked an international securities fraud."
Meanwhile, the U.S. Department of Justice (DOJ) has also charged Palafox criminally for the same incident, with the case being handled by the U.S. Attorney's Office for the Eastern District of Virginia. In its own lawsuit, the DOJ accused Palafox of money laundering, illegal monetary transactions, and fraud using electronic means.
Interestingly, Palafox also operated the same scheme in the United Kingdom but was able to obtain only £612,425 ( worth $816,000 ) from July 2020 to February 2021. The High Court of the United Kingdom shut it down in 2022 after the U.S. DOJ seized the website of the associated entity Praetorian Group International Trading Inc.
SEC demands the return of funds and other measures.
While federal prosecutors will seek prison sentences and forfeitures against Palafoks, the financial regulator wants to recover the assets he acquired through the scheme.
The regulator argued that membership in PGI constitutes securities and that Palafox violated the law by offering and selling unregistered securities, as well as violating anti-fraud provisions. He is now seeking a court order for the return of all proceeds with accrued interest and civil penalties.
In addition, the SEC seeks a permanent ban against Palaphox, which would prohibit him from participating in any multi-level marketing programs that offer or sell securities or crypto assets.
To recover the improperly appropriated funds, the SEC also named several individuals and entities as borrowers. These include the brother of Palafox's wife, Darvi Mendoza, his wife Marissa Mendoza Palafox, and possibly an older family member, Linda Ventura, as well as BBMR Threshold LCC.
The agency claimed that Palafox transferred funds and property acquired by these borrowers and paid off mortgages for Mendoza and Ventura, as well as gifted Ventura a Range Rover car. BBMR was a holding company that Palafox used to conceal assets acquired with misappropriated funds and had two of his relatives as co-managers.
He even transferred his own house, purchased for 1.7 million dollars from investors, to BBMR in August 2021, just a few months before the collapse of PGI Global.
Atkins inherited the modernized SEC.
Meanwhile, this case is the first case related to cryptocurrency under the new SEC chair, Paul Atkins, and corresponds to the type of actions that the SEC plans to focus on now. The agency has already shown that it will not accept regulation through coercion and will focus only on cases related to cryptocurrency where fraud and other obvious violations are evident.
Even before Atkins took office, former acting chairman Mark Uyeda had already taken several steps to reorganize the agency and redirect its focus to traditional matters.
Such actions include the cessation of lawsuits and investigations against crypto structures, the replacement of the Department of Crypto Assets and Cyber Technologies with the Department of Cyber and New Technologies, as well as the establishment of a Crypto Working Group.