A US federal court fined the Brazilian founders of the fake cryptocurrency platform EmpiresX $130 million for defrauding investors. On February 4, the Commodity Futures Trading Commission (CFTC) announced that Emerson Pires, Flavio Goncalves, and Joshua Nicholas had been ordered to pay reparations and penalties for failing to respond to the case.
EmpiresX, an illicit investment site, falsely promised investors enormous profits. Instead of investing the cash as promised, the founders used investor funds to buy digital currencies, including Bitcoin, Ethereum, and Tether, while restricting withdrawals. The defendants also utilized the money for personal luxury items, such as vacations and shopping.
The court determined that Pires and Goncalves obtained at least $40 million from investors by promoting the platform through misleading means, including bogus websites and false claims of managing $85 million. Despite their claims, the platform was never registered with the necessary authorities, and investors were duped into investing in fraudulent earnings and trades that did not exist.
The CFTC obtained a default judgment after the defendants failed to respond to the action within the requisite timeframe. The court ordered Pires and Goncalves to pay a combined civil penalty of $96.5 million, with an extra $32.1 million in disgorgement, while Nicholas faced a separate penalty of $867,000.
In addition to the significant fines, the court barred the founders from trading on US financial markets. This case shows regulatory organizations’ continued efforts to combat fraud in the bitcoin business, advising investors to be cautious and watchful against deceptive investment schemes.
