CFTC fines EmpiresX founders $130 million for crypto fraud
February 06, 2025
On February 4, a judge from the U.S. District Court for the Southern District of Florida issued rulings on fines and bans against Emerson Pires, Flavio Goncalves, and their associate Joshua Nicholas. The case, initiated on June 30, 2022, was concluded with a default judgment, as the defendants failed to respond to the allegations within the required timeframe.
Case details
EmpiresX, through Empires Consulting, lured investors with promises of high returns, but the founders spent the funds on cryptocurrency and personal expenses. They raised at least $40 million, restricted withdrawals, and displayed fake profits. Law enforcement seized $22.8 million in digital assets from them.
Legal sanctions
The company's founders were found guilty of fraud, misappropriation of funds, and violating trading regulations. The court ordered them to pay $32.1 million in restitution and a $96.5 million fine. Nicholas also received additional fines of $289,000 and $867,000.
While Joshua Nicholas was arrested and pleaded guilty to securities fraud in September 2022, Pires and Goncalves fled to Brazil upon learning of the charges. The U.S. Department of Justice issued a warrant for their arrest in July 2022, but Brazilian law prohibits the extradition of its citizens, making their return to the U.S. unlikely.