Ponzi schemer behind $201 million Bitcoin scam sentenced to 20 years in federal prison — promised 3% daily returns on Bitcoin investments, left investors reeling
2 weeks ago
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(Image credit: Getty Images)
The cryptocurrency rush of the late 2010s led to heavy investment in the field. However, as with every gold rush, there are always fake map sellers. One of those is Ramil Ventura Palafox, who today was sentenced to a full 20 years in federal prison by a Virginia court for running a BTC Ponzi scheme worth $201 million.
The enterprise ran from December 2019 to October 2021, and the method itself was as basic as ever, with the added allure of Bitcoin's rise in popularity during that timeframe. Palafox's venture, Praetorian Group International, advertised 0.5 to 3% daily returns to its investors, an impossible figure in any legal setting.
Predictably, those returns only partially occurred by virtue of being funded with new investors. The $201 million consisted of $171 million in BTC transfers and $30 million in fiat currency deposits.
The group wasn't even reportedly trading BTC at a major scale to begin with, and after tallying intra-group money flows, investors lost close to $63 million. Palafox has dual U.S.-Philippines citizenship, and the Philippines SEC issued a public warning in September 2021, outright telling people not to invest and directly calling Preatorian's initiative a Ponzi scheme.
As if the promised daily returns weren't warning enough, existing and potential investors became restless as early as April 2021, after Praetorian started freezing withdrawals, citing technical issues with the BTC blockchain and website problems. Meanwhile, Palafox was living quite a luxurious lifestyle, having spent at least $16 million on Las Vegas and Los Angeles properties, luxury vehicles, designer clothing and furnishings, and gifts for family members.
Palafox was officially charged by the U.S. SEC in April of 2025 and pleaded guilty in September, promising to pay back the $63 million in damages as part of the plea. Even with the sale of Palafox's assets, the chances of any investor getting more than a few pennies on the dollar are incredibly slim.
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Bruno Ferreira is a contributing writer for Tom's Hardware. He has decades of experience with PC hardware and assorted sundries, alongside a career as a developer. He's obsessed with detail and has a tendency to ramble on the topics he loves. When not doing that, he's usually playing games, or at live music shows and festivals.
Ponzi schemer behind $201 million Bitcoin scam sentenced to 20 years in federal prison — promised 3% daily returns on Bitcoin investments, left investors reeling
2 weeks ago
33
English (US) ·