<p>The US Department of Justice announced on Thursday that one of the masterminds of the <a href="https://www.financemagnates.com/cryptocurrency/revolut-gains-cysecs-approval-to-offer-cryptocurrency-services/" target="_blank">cryptocurrency </a>Ponzi scheme, EmpiresX has pled guilty. The scheme defrauded investors of around $100 million.</p><p>Joshua David Nicholas was the 'Head Trader' of the cryptocurrency scheme. He admitted in court that he and others fraudulently promoted the cryptocurrency scheme to lure victims.</p><p>He pled guilty to one count of conspiracy to commit securities <a href="https://www.financemagnates.com/forex/us-court-hits-fx-and-binary-options-pool-fraud-with-29m-in-penalty/" target="_blank">fraud </a>and is now facing a maximum prison sentence of five years. However, his sentencing date has not been scheduled yet.</p><p>A Ponzi Scheme</p><p>EmpiresX claimed to be using a proprietary trading bot that used artificial and human intelligence for maximizing profitability for investors, which was a false representation. Further, to lure <a href="https://www.financemagnates.com/cryptocurrency/news/crypto-investors-lost-1-billion-in-scams-during-the-last-15-months-says-ftc/" target="_blank">investors</a>, fraudulently 'guaranteed' returns and promoted the scheme on social media platforms.</p><p>However, in reality, EmpiresX operated as a <a href="https://www.financemagnates.com/terms/p/ponzi-scheme/" target="_blank" id="43e13ed7-9295-4761-824f-9d9c98eb15a5_3" class="terms__main-term">Ponzi scheme</a>, it paid old investors from the proceeds collected from the new investors.</p><p>The perpetrators even showed screenshots of the company’s profitable account with a well-known electronic trading platform. 12:02However, later it surfaced that EmpiresX did not hold the <a href="https://www.financemagnates.com/terms/t/trading-platform/" target="_blank" id="f85800b2-ccf5-4f50-9e8e-780d32afc6f6_2" class="terms__secondary-term">trading platform</a> accountable and the screenshots were fabricated.</p><p>They even created a fake website to show investors that they are trading with the collected proceeds. However, only $1 million of the investors' funds were sent to a futures trading account. </p><p>Additionally, the crypto scheme did not register for the offering and sale of securities in the United States, despite targeting Americans.</p><p>On top of that, the Commodity Futures Trading Commission filed a separate civil lawsuit against EmpiresX and its two masterminds, Nicholas and two Brazilian citizens, Emerson Pires and Flavio Goncalves.</p><p>However, the original CFTC complaint only measured the solicitation to be of at least $41.6 million, out of which more than $14.3 million were collected from US individuals. That complaint elaborated that the three masterminds misappropriated at least $5 million of the investors’ funds.</p>
This article was written by Arnab Shome at www.financemagnates.com.
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