EmpiresX, one of the key figures found guilty of masterminding the $100 million cryptocurrency “Ponzi” scheme, has now received a sentence of more than four years in prison from a US court. Joshua David Nicholas, the “head trader” of the fictitious cryptocurrency platform EmpiresX, was sentenced. He will now spend a 51-month jail term and three years of supervised release for his part in the fraudulent scam. It comes after Nicholas’ plea on September 8 for conspiring to conduct securities fraud.
The Department of Justice (DOJ) alleges Nicholas made boasts about the platform’s ability to provide daily “guaranteed” returns over two years using a trading bot that combined “artificial and human intelligence” to boost profits. The “bot” was a fraud, and Nicolas, together with his partners Emerson Pires and Flavio Goncalves, ran a “Ponzi” scheme that compensated early investors with funds from later investors. As per the DOJ, the blockchain analysis demonstrates that Brazilian citizens Pires and Goncalves used a “foreign-based” cryptocurrency exchange to launder investors’ money.
According to the Commodity Futures Trading Commission (CFTC), which launched civil cases against the three in June, only around $1 million of investor cash was delivered to a futures trading account for EmpiresX, with the remainder of the funds either lost or misused. The Securities and Exchange Commission (SEC) claimed that investor funds were used to “lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more,” filed fraud charges against the trio at the same time.
Additionally, investors were informed that Nicholas was a professional trader and that EmpiresX was registered as a hedge fund with the SEC. According to the SEC, Nicholas’ was barred from trading by the National Futures Association for stealing customers’ money, and the platform had never been registered with the Commission.
The scheme operated for two years, from roughly September 2020 to the beginning of 2022, when it ended because the platform refused to honor customer withdrawals, who were probably trying to get out of the cryptocurrency market because of significant price declines that had started at that time. In early 2022, Pires and Goncalves, living in Florida, allegedly started winding down EmpiresX’s activities and departed the country; they are now thought to be in Brazil.
Sign up for our newsletter
and don't miss out great opportunities to monotize on your bitcoin