EmpiresX key individual guilty of running the $100 million cryptocurrency Ponzi scheme, has been sentenced to more than four years in prison by a United States court.
Joshua David Nicholas, the head trader of the fictitious cryptocurrency site EmpiresX, was sentenced and will now spend a 51-month prison term as well as three years of supervised release for his part in the fraudulent scam.
The Department of Justice (DOJ) claims Nicholas made boasts about the platform’s ability to provide daily “guaranteed” returns over a two-year period using a trading bot that combined “artificial and human intelligence” to boost profits.
In actuality, the bot was a fake, and Nicolas, along with his partners Emerson Pires and Flavio Goncalves, ran a Ponzi scheme that compensated its investors by using funds from newer investors to pay the original investors. According to the DOJ, blockchain analysis demonstrates that Brazilian nationals 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 were delivered to a futures trading account for EmpiresX, with the majority of funds either lost or misused.
The Securities and Exchange Commission (SEC) also filed fraud charges against the trio at the time, alleging that they used investor funds to “lease a Lamborghini, shop at Tiffany & Co., make a payment on a second property, and more.”
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