EmpiresX ‘Head Trader’ Pleads Guilty for $100M Crypto Ponzi Scheme

The US Department of Justice announced on Thursday that one of the masterminds of the cryptocurrency Ponzi scheme, EmpiresX, pled guilty. The scheme defrauded investors of around $100 million.

Joshua David Nicholas was the “Head Trader” of the cryptocurrency scheme. He admitted in court that he and others fraudulently promoted the cryptocurrency scheme to lure victims.

He pled guilty to one count of conspiracy to commit securities fraud and is now facing a maximum prison sentence of five years. His sentencing date, however, has not been scheduled yet.

A Ponzi Scheme

EmpiresX claimed to be using a proprietary trading bot that used artificial and human intelligence for maximizing profitability for investors, which was a false representation. Further, to lure investors, fraudulently “guaranteed” returns and promoted the scheme on social media platforms.

However, in reality, EmpiresX operated as a Ponzi scheme
Ponzi Scheme

A Ponzi scheme is a scam that looks to lure investors, ultimately paying profits to earlier investors with funds from more later investors.This form of fraud tricks victims into believing that products are instead generated from product sales or other means. In actuality, most investors are completely oblivious to the actual origin of incoming funds.One of the central attributes of a Ponzi scheme is the necessity of its ongoing nature, which is dependent on a steady flow of new contributions and funds. This can unravel quickly should investors request or demand repayment or lose faith in whatever assets they are supposed to own.While earlier episodes of this scam were carried out historically, the name Ponzi scheme is associated with Charles Ponzi in the 1920s.His original scam was based on the legitimate arbitrage of international reply coupons for postage stamps. This eventually gave way to diverting new investors’ money to make payments to earlier investors and to himself.How to Identify Ponzi Schemes?Like any scam, Ponzi schemes follow a few basic trends that investors should be mindful of. A healthy amount of skepticism in regards to investing should always be present, which should help identify ways that scams look to market themselves.For example, Ponzi schemes almost always require an initial investment and…