A former chief executive has been handed a two-decade prison sentence for orchestrating a massive cryptocurrency-based investment fraud, marking a significant enforcement action as regulators intensify scrutiny of the digital asset sector. Ramil Ventura Palafox, the 61-year-old ex-CEO of Praetorian Group International (PGI), was sentenced to 20 years in federal prison on Thursday in Alexandria, Virginia, after pleading guilty to wire fraud and money laundering charges last September.
Scheme Promised Unrealistic Crypto Returns
According to court documents, Palafox operated a sophisticated Ponzi scheme from late 2019 through October 2021, soliciting over $201 million from investors. He promised daily returns ranging from 0.5% to 3% through purported bitcoin trading and foreign exchange activities. Prosecutors detailed that the operation used a multi-level marketing structure to recruit new participants, whose investments were used to pay fabricated returns to earlier investors—a classic hallmark of a Ponzi scheme.
The Internal Revenue Service (IRS) investigation revealed that investors contributed at least 8,198 bitcoin, valued at approximately $171.5 million at the time, into the PGI platform. Authorities estimate investor losses exceeded $62.7 million. Investigators found that Palafox misappropriated millions for personal luxury expenses, including high-end vehicles, real estate, and designer goods, while also transferring substantial assets, including 100 bitcoin and $800,000, to a family member.
Parallel Civil Action by Securities Regulator
In a parallel civil case filed in April 2025, the U.S. Securities and Exchange Commission (SEC) charged Palafox and his company, operating as PGI Global, with raising roughly $198 million from global investors. The SEC complaint alleges the scheme offered "membership" packages tied to false claims of crypto and forex trading prowess. The regulator states Palafox misappropriated more than $57 million, using the remainder to sustain the Ponzi-like payout structure.
Laura D’Allaird, head of the SEC’s Cyber and Emerging Technologies unit, stated that Palafox "exploited the facade of technological innovation to attract and defraud investors." The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. The civil case remains pending in Virginia federal court, with the Department of Justice having intervened to stay discovery while the criminal prosecution proceeded.
Broader Context of Crypto Enforcement
This sentencing occurs amid a concerted crackdown by U.S. authorities on fraudulent high-yield crypto investment programs, following the market turmoil that included the collapse of major platforms like FTX. The PGI case is considered one of the larger cryptocurrency fraud prosecutions in recent years, both in terms of capital involved and the number of affected investors.
The scheme began to unravel in mid-2021 when PGI Global’s website went offline. Palafox resigned as CEO that September after failed attempts to relaunch the operation. Philippine regulators had issued a fraud alert concerning the company, and subsequent seizure of the website by U.S. tax authorities effectively halted its ability to attract new investors.
The Federal Bureau of Investigation (FBI) maintains a victim update page and is currently gathering information from potential victims who may be eligible for restitution payments or victim services. However, legal experts note that a criminal sentence does not guarantee full victim repayment, as asset recovery—particularly across international borders and involving cryptocurrency transactions—often faces significant challenges.
This case underscores the persistent risks within the emerging digital asset ecosystem and highlights the ongoing collaborative efforts between criminal prosecutors and civil securities regulators to combat sophisticated financial fraud. Investors are reminded to exercise extreme caution with investments promising guaranteed or abnormally high returns, especially in the volatile cryptocurrency markets.
