A massive crypto Ponzi scheme has left tens of thousands of investors holding empty digital wallets. PGI and its CEO Palafox promised the impossible: daily returns of 0.5% to 3% through a Bitcoin trading program that didn’t actually exist. Classic snake oil, digital edition.
Over 90,000 people worldwide fell for it. Losses? Somewhere between $62 million and $200 million, depending on who’s counting. That’s a lot of Bitcoin down the drain.
The operation was textbook fraud. Investors logged into a fake portal showing growing balances and fantastic returns. Pure fiction. Meanwhile, Palafox was living large – $3 million on luxury cars, more than $6 million on multiple homes, plus jewelry and fancy furnishings. Similar to gas fee mechanics, each transaction required validation but the system was entirely fraudulent. He even transferred about $800,000 in cash and 100 Bitcoin (worth around $3.3 million) to a family member. Nice.
The scheme relied on a multi-level marketing structure. Recruit your friends, earn commissions. Your friends recruit their friends. Everyone’s happy until the music stops.
And stop it did. When too many investors tried withdrawing their “profits,” the whole house of cards collapsed. Turns out you can’t actually generate 3% daily returns consistently in any market. Shocking, right?
The DOJ wasn’t amused. Palafox pled guilty to wire fraud and securities violations, with sentencing set for February 3, 2026. Assistant U.S. Attorneys Jack Morgan, Zoe Bedell, and Annie Zanobini led the prosecution.
This fiasco is just part of a broader trend. Similar to how the LUNA collapse wiped out at least $40 billion in wealth in 2022.
Over $2.17 billion was stolen from crypto services in 2025 alone – a 17% increase from 2024. Crypto crime is booming business.
The victims span the globe, with significant concentrations in the U.S., Germany, Russia, Canada, Japan, Indonesia, and South Korea. The fastest growth in victim numbers has been in Eastern Europe and the Middle East from the first half of 2024 to 2025.
Lesson here? Math doesn’t lie. Anyone promising 3% daily returns is selling fantasy. That’s nearly 1,100% annually. Even Bernie Madoff kept his promises more realistic.
