Crypto CEO Gets 20 Years for $200M Bitcoin Ponzi Scheme
A federal judge in Virginia has sentenced Ramil Ventura Palafox, the 61-year-old CEO of Praetorian Group International (PGI), to 20 years in prison for orchestrating a massive $200 million Bitcoin Ponzi scheme that defrauded over 90,000 investors worldwide.
Palafox, a dual US-Philippine citizen, was convicted of wire fraud and money laundering after running the scam from December 2019 to October 2021. Prosecutors say he lured victims with fake promises of daily Bitcoin trading returns up to 3%, while using new investor money to pay earlier participants and fund a lavish lifestyle.
This is one of the largest crypto Ponzi convictions by investor count and dollar volume, and it comes amid heightened regulatory scrutiny on fraudulent crypto schemes.
How the PGI Ponzi scheme worked
PGI operated as a supposed Bitcoin trading platform that promised consistent, low-risk daily returns, typically 0.5% to 3% per day, through an “advanced trading algorithm.”
- Investors deposited over $201 million total, including 8,198 BTC worth ~$171.5 million at the time.
- Palafox showed fake gains on a custom online portal, creating the illusion of steady profits to encourage more deposits.
- In reality, little to no real Bitcoin trading occurred; new money paid “returns” to earlier investors, a textbook Ponzi dynamic.
- When new inflows slowed in late 2021, the scheme collapsed, leaving victims with confirmed losses of at least $62.7 million.
Palafox’s luxury spending exposed the fraud
Court documents revealed Palafox diverted millions for personal use:
- Real estate: Lavish properties in California and Las Vegas.
- Cars: ~$3 million on luxury vehicles, including Lamborghinis and Ferraris.
- Other extravagances: High-end purchases that contrasted sharply with PGI’s supposed trading sophistication.
The U.S. Attorney’s Office called it a “carefully orchestrated Ponzi scheme” designed to appear legitimate through fabricated performance data and professional branding.
Legal outcome and penalties
- Sentence: 20 years in federal prison, handed down by U.S. District Judge M. Brinkema.
- Restitution: Ordered to pay $62.7 million to victims.
- Forfeiture: $12.2 million in assets seized.
- Parallel SEC case: Civil action by the U.S. Securities and Exchange Commission ran alongside the criminal prosecution.
Palafox pled guilty in September 2025 to wire fraud and money laundering charges, paving the way for the sentencing in February 2026.
Why this case stands out
- Scale: Over 90,000 victims globally, making it one of the largest crypto frauds by investor count.
- Bitcoin focus: Unlike many scams promising “moonshots,” PGI targeted conservative investors with steady daily returns, mimicking legitimate trading platforms.
- Timing: The scheme peaked during Bitcoin’s 2020-2021 bull market, when retail enthusiasm was high but due diligence often low.
- Regulatory signal: DOJ and SEC coordination shows U.S. authorities are treating crypto Ponzi schemes as serious financial crimes, not just tech scams.
Lessons for crypto investors
This case is a stark reminder of Ponzi red flags in crypto:
- Too-good-to-be-true returns: 0.5–3% daily (annualized ~180–1000%) are unrealistic for any trading strategy.
- Opaque platforms: Fake dashboards showing gains without verifiable proof or third-party audits.
- Pressure tactics: Urgency to deposit more to “lock in” returns or avoid missing out.
- Withdrawal issues: Delays or excuses when trying to cash out principal.
Investors lost millions, but the conviction offers some justice and sends a message: regulators are cracking down hard on fraudsters hiding behind crypto branding.
