The US DOJ (Division of Justice) has secured a 20-year jail sentence towards the founding father of a sprawling crypto funding scheme.
In keeping with prosecutors, this scheme had defrauded greater than 90,000 traders worldwide of over $200 million.
Sponsored
Sponsored
DOJ Exposes and Dismantles $200 Million Bitcoin Ponzi as Founder Receives 20-Yr Jail Time period
In an announcement launched on Thursday, the DOJ confirmed that Ramil Ventura Palafox, 61, was sentenced after pleading responsible to wire fraud and cash laundering costs.
Palafox was the founder, chairman, and CEO of Praetorian Group Worldwide (PGI), a multi-level advertising and marketing firm that claimed to generate outsized returns via Bitcoin buying and selling and crypto-related methods.
In keeping with courtroom paperwork, PGI operated from December 2019 to October 2021, elevating greater than $201 million from traders worldwide. The corporate promised every day returns of 0.5% to three%, marketed as earnings from refined Bitcoin arbitrage and buying and selling actions.
In actuality, investigators discovered PGI was not conducting buying and selling on the scale required to generate such returns. As a substitute, it functioned as a traditional Ponzi scheme, utilizing funds from new traders to pay earlier individuals.
Authorities mentioned a minimum of $30.2 million was invested in fiat forex, alongside 8,198 Bitcoin valued at roughly $171.5 million on the time of funding.
Confirmed losses reached a minimum of $62.7 million, although prosecutors indicated the entire monetary hurt might be considerably increased.
Lavish Life-style and Fabricated Income: How Palafox Hid the Collapse Behind a Luxurious Facade
To take care of the phantasm of profitability, Palafox allegedly created and managed a web based investor portal that displayed fabricated account balances.
Sponsored
Sponsored
Between 2020 and 2021, the platform persistently misrepresented funding efficiency. It falsely confirmed regular features and bolstered investor confidence even because the scheme unraveled behind the scenes.
Courtroom filings element how Palafox diverted substantial quantities of investor funds to finance a lavish private life-style.
In keeping with prosecutors, he spent roughly $3 million on 20 luxurious autos. He additionally spent roughly $329,000 on penthouse lodging at a luxurious resort chain and bought 4 residential properties in Las Vegas and Los Angeles value greater than $6 million.
Extra expenditures included round $3 million on designer clothes, jewellery, watches, and residential furnishings from high-end retailers.
Prosecutors additional alleged that Palafox transferred a minimum of $800,000 in fiat forex and 100 Bitcoin—then valued at roughly $3.3 million—to a member of the family.
The scheme started to break down in mid-2021 after PGI’s web site went offline and withdrawal requests mounted. Though Palafox resigned as CEO in September 2021, authorities mentioned he initially retained management over firm accounts.
Sponsored
Sponsored
Prosecutors described this case as one of many extra vital crypto-related Ponzi schemes in recent times. The sentencing marks a decisive conclusion to a scheme that thrived on exaggerated crypto earnings and international recruitment networks.
Parallels with FTX: How PGI Echoed a Bigger Crypto Collapse
Regardless of variations in scale and class, this case is analogous in some ways to the FTX collapse and related contagion. Each exploited the crypto increase, promising traders outsized, unrealistic returns:
- Palafox with every day Bitcoin features of 0.5–3%,
- FTX via high-yield alternate merchandise tied to Alameda Analysis.
Investor funds have been misappropriated for lavish private spending:
- Palafox on luxurious automobiles, actual property, and designer items
- SBF on Alameda’s dangerous bets, properties, and political donations.
Sponsored
Sponsored
Each schemes used misleading strategies to keep up investor confidence:
- PGI with a pretend portal displaying regular features
- FTX with hidden liabilities and inflated valuations.
PGI defrauded over 90,000 traders with confirmed losses exceeding $62.7 million, whereas FTX affected tens of millions and billions in lacking funds.
Federal prosecutions adopted, with Palafox sentenced to twenty years in February 2026 and SBF to 25 years in 2024.
All these spotlight a development amongst dangerous actors in crypto whereas additionally revealing the DOJ’s ongoing crackdown on crypto-related fraud.