U.S. Regulators and Law Enforcement Crack Down on $200M Bitcoin Ponzi Scheme

U.S. authorities have delivered a strong message to the cryptocurrency sector following the sentencing of Ramil Ventura Palafox, CEO of Praetorian Group International (PGI), to 20 years in prison for operating a global Ponzi scheme. The case, prosecuted by the U.S. Attorney’s Office for the Eastern District of Virginia with investigations led by the FBI and IRS Criminal Investigation, underscores the ongoing vigilance of regulators and law enforcement in tackling high-tech investment fraud.

Between December 2019 and October 2021, PGI falsely claimed to trade bitcoin and promised daily returns of 0.5–3%, deceiving over 90,000 investors worldwide. Investors deposited more than $201 million — including over 8,000 bitcoin — while the firm misrepresented portfolio performance through its website, creating the illusion of steady gains. Victims ultimately suffered losses exceeding $62 million.

Authorities uncovered that Palafox used investor funds for personal luxuries, including 20 high-end vehicles, multiple penthouse suites, designer goods, and over $6 million in real estate. These expenditures were part of the deceptive practices designed to lure additional investments.

The prosecution emphasizes that Ponzi schemes in crypto markets often rely on sophisticated online platforms and misrepresentation, making cross-agency enforcement essential. Victims may be eligible for restitution payments, and the U.S. Attorney’s Office has provided guidance for claims submission.

BrokersView remind investors to verify platform legitimacy, be skeptical of guaranteed returns, and report suspicious trading activity. The PGI case serves as a stark warning of how fraudulent investment operations can span borders, highlighting the importance of regulatory oversight and law enforcement cooperation in the evolving cryptocurrency landscape.