90,000 Duped in $200 Million Crypto Scam, SEC Charges PGI Global CEO

The agency said that around 90,000 people joined the scheme, which raised $200 million before it collapsed.

According to an April 22 statement from the SEC, Palafox, who holds both US and Philippine citizenship, used his company, PGI Global, to collect money from investors between January 2020 and October 2021. Instead of using those funds for trading, the SEC said that Palafox kept over $57 million for himself.

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The business followed a multilevel marketing structure, where people were encouraged to bring in others with the promise of bonuses. The SEC said that this turned into a "Ponzi-like" setup, where new investments were used to pay earlier participants.

Palafox also organized events in places like Dubai and Las Vegas to attract more members. These events were paid for with investor money, according to the complaint.

Marketing materials promoted PGI Global as a company with knowledge of cryptocurrency and an artificial intelligence (AI) trading system. The SEC, however, stated that there was no such technology behind the scenes.

Scott Thompson, Associate Director of the SEC’s Philadelphia office, stated, "Palafox attracted investors with the allure of guaranteed profits from sophisticated crypto asset and foreign exchange trading, but instead of trading, Palafox bought himself and his family cars, watches, and homes using millions of dollars of investor funds".

Recently, Albert Saniger, a US tech founder, was charged with fraud over his shopping app, nate. What happened? Read the full story.