Billion-Dollar Crypto Fraud? US Court Fines EmpiresX Founders with Huge Fines!
The Commodity Futures Trading Commission (CFTC) reported that a US federal court has ordered the Brazilian founders of EmpiresX, an illegal cryptocurrency investment platform, to pay more than $130 million in penalties and reparations. EmpiresX founders Emerson Pires and Flavio Goncalves, together with colleague Joshua Nicholas, were subject to permanent injunctions, financial penalties, and other legal measures on February 4 by Judge Cecilia Altonaga of the US District Court for the Southern District of Florida. Originally filed on June 30, 2022, the action ended in a default judgment because the defendants did not answer the claims by the due date.
Court Finds EmpiresX Founders Guilty of Crypto Investment Fraud
The court records state that Empires Consulting ran EmpiresX, a fraudulent investment scheme that deceitfully promised investors large profits. Pires and Goncalves were accused of using fraudulent cryptocurrency ads to defraud people out of at least $40 million. The creators misappropriated the funds by buying Bitcoin, Ether, and USDt instead of investing them as promised. They also restricted withdrawals and displayed fictitious earnings from investments that never existed.
The funds were utilized by the EmpireX founders for travel and other personal costs, such as luxuries. The executives of EmpiresX were found guilty by the court of several offenses, including trading and regulatory violations, false misrepresentation and deception, failure to register with the CFTC, and misuse of funds. The founding pair allegedly fled to Brazil after learning of the CFTC allegations, even though Nicholas was arrested and entered a guilty plea to conspiracy to conduct securities fraud on September 8, 2022.
CFTC Bans EmpiresX Founders from US Markets
A notice to convert the founders of EmpiresX to fugitive status was filed by the US Department of Justice in July 2022. Their arrest and extradition to the US is improbable, though, because Brazilian law forbids the extradition of its people.
In addition to a $96.5 million civil monetary penalty, the founders were jointly penalized $32.1 million for disgorgement. Nicholas received fines of $867,000 and $289,000 for the same violations. Along with more than $130 million in fines, the CFTC obtained a court order prohibiting the defendants from engaging in financial market trading in the United States.
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