Crypto Platform “Head Trader” Pleads Guilty in $100 Million Ponzi Scheme

ACFE Communications Manager 

John Duffley 

The head trader of EmpiresX, a global cryptocurrency platform headquartered in Florida, pleaded guilty on September 8 in an alleged investment fraud that raised around $100 million for the company, according to the U.S. Justice Department. 

Joshua David Nicholas, 28, admitted to the securities fraud in which he and others at EmpiresX falsely claimed their business’ trading bot, which utilized artificial and human intelligence, mitigated risk and increased the chances of profitability on an investment. In reality, the approximately $100 million received from investors was paid out to the company’s earliest investors in a Ponzi scheme. Additionally, EmpiresX never registered, nor made any attempt to register, as a legitimate investment program with the U.S. Securities and Exchange Commission (SEC). 

EmpiresX co-founders Emerson Sousa Pires and Flavio Mendes Gonçalves were indicted by the Justice Department alongside Nicholas back in June on conspiracy to commit wire fraud and securities fraud charges; the co-founders faced charges of conspiracy to commit money laundering as well. The SEC filed charges the same day against the company and trio, alleging the men misled investors with false claims of a 1% daily profit when using their technology, as well as misappropriating investor funds for personal use. 

Pires and Gonçalves also allegedly prevented investors from withdrawing any funds before fleeing to their home country of Brazil, according to the SEC. 

Nicholas faces up to five years in prison on one count of conspiracy to commit securities fraud. 

EmpiresX first formed in 2017 before “officially” launching in 2020, according to an introductory webinar on the company’s website. Defining its core values as innovation, transparency and tranquility, the fraudulent organization claimed to “devise strategies that even with the market down, we have an exponential profit.” On the contrary, the company’s Earnings & Income Disclaimer cites at least four times there is “no assurance” investors will do well. 

The Justice Department encourages potential investor victims of the EmpiresX scheme to identify themselves and learn about their rights through their website.