EmpiresX: What is now a major trader pleads guilty to a $100 million ponzi scheme

The main trader of crypto platform EmpiresX has pleaded guilty to one count of conspiracy to commit securities fraud. The charges against the alleged are linked to a global Ponzi scheme defrauding $100 million investors.

According to a US Department of Justice press release, the lead trader has admitted to misleading investors about the potential for a return on investment (ROIS). He also admitted to falsely promoting a “trading robot” powered by artificial intelligence.

Fraud overview

The plaintiffs in the court alleged that the main trader, along with the founder of the platform, lured investors by promising returns of up to 1% per day. But the fact is that they paid existing investors using the money invested by new investors. This is how it works like a Ponzi scheme.

In addition, the plaintiffs added, EmpiresX failed to register its investment program with the Securities and Exchange Commission (SEC). The founders fraudulently assured users that the platform was registered as a hedge fund with the Securities and Exchange Commission.

A federal grand jury in South Florida indicted the defendants for the first time on June 30. At the time, the indictment was said to be linked to a “global cryptocurrency-based fraud” that netted $100 million.

The three defendants are charged with conspiracy to commit Internet fraud and one is charged with conspiracy to commit securities fraud. Furthermore, the indictment charged the founders with conspiracy to commit international money laundering. The founders risk imprisonment of up to forty-five years.

Record of the Supreme Education Council

Following the indictment, the Securities and Exchange Commission (SEC) filed civil fraud charges against the company, its founder and principal dealer. The watchdog alleged that the accused “embedded large sums of investors’ money for personal use.”

A press release issued by the Securities and Exchange Commission detailed the embezzlement by the defendants. He also mentioned that only a small amount went into the investors’ Empire X brokerage account. The organizer claimed that most of the money went to extravagant spending. This included renting a Lamborghini, buying items from the luxury brand Tiffany & Co., real estate investments, etc.

The CFTC doubled down on defendants by filing separate charges in parallel proceedings with the Securities and Exchange Commission.

Bad platforms and actors like these are putting the broader crypto industry at a disadvantage and calling everyone into trouble. This leads to more problems for those who act in good faith.

Scams and scams like this give regulators additional reasons to demand strict regulations and close scrutiny.

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