It’s unclear if the Brazilian nationals will be able to pay the fine
A US federal court has imposed more than $130 million in fines and restitution against the Brazilian founders of EmpiresX, a fraudulent cryptocurrency investment platform. The Commodity Futures Trading Commission (CFTC) announced the ruling, which includes permanent bans and financial penalties for the individuals involved.
On February 4, Judge Cecilia Altonaga of the US District Court for the Southern District of Florida issued the decision against EmpiresX founders Emerson Pires and Flavio Goncalves, along with associate Joshua Nicholas. The court’s ruling followed a default judgment, as the defendants failed to respond to the allegations in time.
EmpiresX lured investors with false promises of significant returns, operating as a fraudulent investment scheme under Empires Consulting. According to court documents, Pires and Goncalves raised at least $40 million from investors through deceptive advertising.
Rather than investing the funds as claimed, they diverted them to purchase Bitcoin, Ether, and USDt, while also restricting withdrawals and fabricating profits. Authorities also revealed that the duo used investor money for luxury expenses and personal travel. Approximately $22.8 million in digital assets was recovered during the investigation.
The court determined that the founders had engaged in multiple violations, including fraudulent misrepresentation, misappropriation of funds, and operating without proper registration with the CFTC. Nicholas, who served as EmpiresX’s head trader, was arrested and pleaded guilty to conspiracy to commit securities fraud in September 2022. Meanwhile, Pires and Goncalves fled to Brazil, where extradition laws prevented them from being sent back to the US.
The ruling imposes $32.1 million in disgorgement and a $96.5 million civil monetary penalty on the founders. Nicholas faces fines totaling over $1.1 million. Additionally, the court permanently banned all three from participating in US financial markets.
CFTC officials emphasized their commitment to cracking down on fraudulent schemes, with enforcement director Brian Young stating that upcoming regulatory adjustments will help maintain market integrity.
