EmpiresX’s ‘Header Trader’ Could Face 4 Years In Prison For A $100M Crypto ‘Ponzi’
Two more individuals who helped operate the phony cryptocurrency exchange EmpiresX in the United States are thought to be in Brazil.
A United States court has imposed a prison term of almost four years on one of the significant persons convicted of being behind the $100 million crypto “Ponzi” scheme, EmpiresX.
Joshua David Nicholas, the “head trader” of the phony cryptocurrency platform EmpiresX, has been sentenced to 51 months in jail and three years of supervised release for his role in the fraudulent scam.
Nicholas pled guilty to conspiracy to conduct securities fraud on September 8.
During two years, Nicholas, according to the Department of Justice (DOJ), claimed the platform’s trading bot would optimize daily “guaranteed” returns using “artificial and human intelligence.”
The “bot” was a hoax, and Nicolas, Emerson Pires, and Flavio Goncalves ran a “Ponzi” scam that paid early investors with funds from subsequent investors. The Department of Justice argues that blockchain analytics prove Pires and Goncalves, both Brazilian nationals, laundered investor cash through a “foreign-based” cryptocurrency exchange.
According to the Commodity Futures Trading Commission (CFTC), which launched civil cases against the three in June, only approximately $1 million of investor cash was delivered to EmpiresX’s futures trading account, with the majority of funds either lost or misused.
At the same time, the Securities and Exchange Commission (SEC) filed fraud charges against the three, alleging that investor funds were used to “lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more.”
Investors were also informed that EmpiresX was an SEC-registered hedge fund and Nicholas was a professional trader.
According to the SEC, the platform was never registered with the Commission, and Nicholas’ trading privileges were suspended by the National Futures Association for misappropriating client cash.
The plan lasted around two years, from September 2020 to early 2022, when it collapsed because the platform refused to accept withdrawal requests from customers who were likely attempting to exit the cryptocurrency market owing to significant price declines.
Pires and Goncalves, who resided in Florida, allegedly began winding down EmpiresX operations in early 2022 and fled the United States; they are currently thought to be in Brazil.
