Bitcoin Ponzi Schemer Gets 20 Years for $201M Scam Promising 3% Daily Returns

A Virginia federal court has sentenced Ramil Ventura Palafox to 20 years in prison for orchestrating a massive Bitcoin Ponzi scheme that defrauded investors of $201 million during the cryptocurrency boom of 2019-2021. The scheme, operated through Palafox's Praetorian Group International, promised investors returns of 0.5% to 3% daily on their Bitcoin investments—returns that would have been impossible to sustain in any legitimate financial operation.

The fraudulent enterprise ran from December 2019 to October 2021, a period that coincided with Bitcoin's dramatic price appreciation and growing mainstream adoption. During this timeframe, Palafox collected $171 million in Bitcoin transfers and $30 million in fiat currency deposits from unsuspecting investors lured by the promise of extraordinary daily returns.

As with all Ponzi schemes, the returns paid to early investors were funded by the capital contributions of new participants rather than any actual trading profits. Court documents reveal that Praetorian Group International wasn't even conducting significant Bitcoin trading operations. After accounting for the flow of money within the scheme, investors ultimately lost approximately $63 million.

The warning signs were present throughout the operation's lifespan. The Philippines Securities and Exchange Commission issued a public warning in September 2021, explicitly advising against investing in Praetorian's initiative and directly labeling it a Ponzi scheme. The promised daily returns of up to 3% should have been an immediate red flag—such returns would compound to over 1,000% annually, far exceeding any legitimate investment vehicle's performance.

Investor concerns escalated as early as April 2021 when Praetorian began freezing withdrawals. The company cited technical issues with the Bitcoin blockchain and website problems as justification, but these excuses were merely cover for the scheme's inevitable collapse as new investor recruitment slowed.

While investors saw their funds frozen, Palafox was living an extravagant lifestyle funded by the stolen money. Court records show he spent at least $16 million on luxury properties in Las Vegas and Los Angeles, high-end vehicles, designer clothing and furnishings, and gifts for family members. This lavish spending pattern is typical of Ponzi scheme operators who treat investor funds as their personal piggy bank.

Palafox, who holds dual U.S.-Philippines citizenship, was officially charged by the U.S. Securities and Exchange Commission in April 2025 and pleaded guilty in September of the same year. As part of his plea agreement, he promised to pay $63 million in restitution to victims, though the likelihood of investors recovering meaningful amounts appears slim.

The case highlights the persistent vulnerability of cryptocurrency investors to classic financial fraud schemes. Despite Bitcoin's technological sophistication and decentralized nature, human greed and deception continue to exploit those seeking extraordinary returns. The 20-year sentence sends a strong message about the serious consequences of cryptocurrency fraud, though for the victims who lost millions, the punishment provides little comfort for their financial losses.

The collapse of Praetorian Group International serves as a cautionary tale for cryptocurrency investors: if an investment promises guaranteed daily returns of 3%, especially in the volatile cryptocurrency market, it's almost certainly too good to be true.