Head Trader of $100M Global Crypto Ponzi Scheme Pleads Guilty in US

The head trader of a $100 million global cryptocurrency Ponzi scheme has pleaded guilty and is facing up to five years in prison, according to the U.S. Department of Justice (DOJ). “The defendants allegedly misappropriated large sums of investors’ money to lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more.”

The U.S. Department of Justice (DOJ) announced Thursday that Joshua David Nicholas has pleaded guilty for his role as the “head trader” in a “global cryptocurrency investment fraud scheme that amassed approximately $100 million from investors.”

The 28-year-old Florida man admitted that he and others made numerous misrepresentations about Empiresx, a purported cryptocurrency platform, to investors, including promising “guaranteed” returns and claiming that Empiresx operated a trading bot that used artificial and human intelligence to maximize profitability for investors.

The DOJ detailed:

Instead, Empiresx operated a Ponzi scheme by paying earlier investors with money obtained from later Empiresx investors.

The U.S. Securities and Exchange Commission (SEC) also charged Nicholas along with Empiresx founders Emerson Pires and Flavio Goncalves, both of Brazil, in June with violating the registration and anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Noting that Empiresx never registered its investment program with the SEC, the securities regulator said:

The bot was fake, Nicholas’ trading resulted in significant losses, and the defendants only transferred a small portion of investors’ funds to Empiresx’s brokerage account.

“Instead, the defendants allegedly misappropriated large sums of investors’ money to lease a Lamborghini, shop at Tiffany & Co., make a payment on a second home, and more,” the SEC described.

The Justice Department indicted all three men in June with “one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud.” Pires and Goncalves were also charged with “conspiracy to commit international money laundering.” According to the indictment, the pair laundered investors’ funds through a foreign-based cryptocurrency exchange.

The Justice Department noted:

Nicholas pleaded guilty to one count of conspiracy to commit securities fraud and faces a maximum penalty of five years in prison.

Do you think Nicholas should go to prison for five years for his role in the Empiresx crypto Ponzi scheme? Let us know in the comments section below.