US Court Sentences CEO of Bitcoin Firm to 20 Years for Ponzi Scheme
In a significant legal development, a United States court has handed down a 20-year prison sentence to the CEO of Praetorian Group International (PGI), a Bitcoin trading company, for orchestrating an extensive Ponzi scheme. The deceptive investment operation, which falsely promised substantial returns from cryptocurrency trading, swindled large sums of money from tens of thousands of investors worldwide.
Massive Bitcoin Fraud Uncovered in Palafox Scheme
According to a detailed statement from the Department of Justice (DOJ), Ramil Ventura Palafox, a 61-year-old who holds dual citizenship in the United States and the Philippines, masterminded this intricate fraud through his registered company, PGI. As the chairman, CEO, and primary promoter, Palafox presented PGI as a Bitcoin trading firm that could deliver daily returns of 0.5% to 3%. However, investigations uncovered that the firm was not engaged in legitimate Bitcoin trading at a scale capable of supporting such promises.
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The fraudulent operation spanned from December 2019 to October 2021, attracting more than 90,000 global investors who collectively injected over $201 million into PGI. This included in excess of $30 million in fiat currency and around 8,198 Bitcoins, valued at over $171 million at that time. Despite these enormous investments, authorities found that payouts to investors were primarily funded with money from new investors rather than from actual trading profits.
In an effort to maintain investor trust, Palafox went so far as to create an online portal showcasing fabricated investment performance. Between 2020 and 2021, this portal consistently displayed increasing account balances, misleading investors into believing that their investments were safe and profitable.
Furthermore, investigations revealed that Palafox diverted significant investor funds for personal luxury purchases. Allegedly, he spent approximately $3 million on acquiring 20 luxury vehicles and equal amounts on accessories such as jewelry, clothing, and watches. Due to these fraudulent activities, Palafox was convicted of wire fraud and money laundering, resulting in his 20-year prison sentence.
FBI Seeks Restitution for Affected PGI Investors
In related news, the Federal Bureau of Investigation’s Washington Field Office is actively working to identify individuals who suffered financial losses from investments in PGI during the years 2020 and 2021. Following Palafox’s conviction in September 2025, federal agents have urged individuals who believe they are eligible for restitution or require victim services to complete the necessary forms. Total losses from the Bitcoin Ponzi scheme are currently estimated at $62.7 million.
The broader context sees the total cryptocurrency market cap valued at $2.33 trillion, underscoring the scale and impact of such fraudulent activities in the crypto space.
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