SEC says $57 million spent on luxurious items and houses.
Iranian nationwide indicted for working darkish net market Nemesis.
Over 400,000 orders processed utilizing solely cryptocurrency.
The US Securities and Change Fee (SEC) has filed costs in opposition to Ramil Palafox, a twin citizen of the US and the Philippines, accusing him of orchestrating a $198 million crypto funding fraud by his firm, PGI World.
The case highlights ongoing dangers in decentralised finance, the place traders proceed to fall prey to schemes promising assured income from unverified cryptocurrency and foreign exchange ventures.
Palafox allegedly ran a world multi-level advertising operation from January 2020 to October 2021 earlier than the scheme collapsed, leaving traders with substantial losses.
SEC claims $57 million used for private spending
In keeping with the SEC’s submitting within the Jap District of Virginia, Palafox introduced PGI World as an AI-powered crypto and overseas change buying and selling platform.
Nonetheless, the regulator alleges there was no actual buying and selling exercise.
As a substitute, over $57 million in investor funds had been diverted to buy luxurious items and actual property for Palafox and his household.
The SEC’s criticism seeks the return of misappropriated funds, civil penalties, and a everlasting injunction to forestall Palafox from working future schemes.
The construction of PGI World mirrored that of a basic Ponzi scheme, the place older traders had been paid returns utilizing capital from new entrants.
Working as an MLM enterprise, it expanded globally by providing recruitment-based commissions and falsely portraying Palafox as a seasoned crypto professional.
Legal proceedings escalate with DOJ involvement
In parallel to the SEC’s civil criticism, the US Legal professional’s Workplace has filed legal costs in opposition to Palafox.
Whereas particular costs haven’t been detailed within the SEC press launch, the Division of Justice is pursuing the case in federal court docket, indicating the opportunity of vital penalties, together with imprisonment.
The proceedings mark one other chapter in US efforts to crack down on large-scale cryptocurrency fraud.
The SEC’s motion comes amid rising issues concerning the misuse of crypto platforms to masks fraudulent exercise and bypass conventional monetary regulation.
Whereas some enforcement actions give attention to platform compliance or token choices, this case highlights particular person accountability and the misuse of investor belief.
Iranian nationwide indicted in separate darkish net case
In a associated growth, the US Division of Justice has indicted Behrouz Parsarad, an Iranian nationwide, for working a darkish net market named Nemesis.
The positioning processed over 400,000 transactions between 2021 and 2024, dealing primarily in fentanyl, different managed substances, malware, and stolen monetary knowledge.
Parsarad additionally allegedly used cryptocurrency to launder proceeds from these gross sales, concealing the origin of the funds and working solely in digital property.
Nemesis reportedly prohibited all transactions in fiat currencies, successfully forcing customers to make use of cryptocurrency to make sure anonymity.
If convicted, Parsarad faces a minimal jail sentence of 10 years and could possibly be sentenced to life.
His indictment follows a collection of comparable crackdowns, together with the FBI’s latest arrest of Anurag Pramod Murarka for laundering $24 million by the darkish net.
The back-to-back developments involving Palafox and Parsarad show a widening web forged by US authorities to handle the twin menace of monetary fraud and legal use of decentralised applied sciences.
With cryptocurrency use increasing throughout borders, regulatory our bodies are intensifying enforcement to discourage abuse, improve investor safety, and convey extra transparency to the ecosystem.
