A U.S. federal court has imposed over $130 million in penalties on the founders of EmpiresX, a fraudulent cryptocurrency investment platform.
Misused Funds to Commit Fraud
The case against EmpiresX began in June 2022 with charges of defrauding investors with false promises of high returns. Founders Emerson Pires and Flavio Goncalves are accused of deceiving investors out of at least $40 million, which they misused for personal purchases and digital assets acquisition. Investors were meanwhile shown fake profits to create an illusion of business success.
Ongoing Legal Action Despite Fugitives’ Escape
The court's decision was made by default as the accused did not respond to the charges. While associate Joshua Nicholas was arrested and pled guilty, Pires and Goncalves escaped to Brazil, where extradition is legally barred.
Court Decision and Its Impact
Beyond financial penalties of $32.1 million and $96.5 million on the EmpiresX founders, and fines for Nicholas, the court permanently banned them from U.S. markets. Despite the escape, the Commodity Futures Trading Commission remains committed to market integrity.
The EmpiresX case underscores the necessity of investor protection and order in the crypto sphere. Despite challenges in this case, investor rights and safety remain a priority.
