A lose-lose game – Recently, a Ponzi scheme type scam demonstration was made by a crypto-enthusiast. He wanted to warn investors about this new asset class represented by Bitcoin (BTC) and its ilk. And of course, he reimbursed all the sums embezzled. But in our case today, the fooled crypto investors lost millions of dollars. The author of the scam finds himself before the judges. The crypto scam does not always pay.
Fall Of Empiresx: A New Ponzi Fails Directly In The Prison Box
Scams follow and unfortunately look-alike in the cryptosphere. Enthusiasm for new technologies related to blockchains and cryptocurrencies is grilling the wings of many investors. The latter is, indeed, a little too naive on promises that are too good to be true.
The latest scam to fall into the nets of the United States Department of Justice (DoJ) is the “investment” platform called empires. One of its main players, Joshua David Nicholas, was accused of running a pyramid scheme, or Ponzi scheme. The latter made it possible to extort a total of $100 million from crypto-investors.
According to the DoJ press release published on September 8, 2022, the accused pleaded guilty to the count of conspiring to commit securities fraud. He faces a sentence of up to five years in prison.
Always The Same False Promise: Magical Returns
The 28-year-old man from Florida clearly led and promoted a fairly standard Ponzi scheme. Presenting himself as “chief trader”, he allegedly made fraudulent statements about a “trading robot with guaranteed returns”.
In reality, he and his EmpireX cronies paid for so-called early investor returns with money obtained from later investors. That is to say, the very definition of a Ponzi scheme turned into a crypto scam.
In addition, and contrary to false statements by members of EmpireX, the company has never been registered with the services of the Securities and Exchange Commission (SEC). The American financial policeman filed a civil complaint (last June) against the accused and some of his accomplices. The years in prison will therefore certainly be accompanied by very heavy fines.
If most of these crooks end up being caught by justice, some manage to play the fugitives for a long time. This is the case of Ruja Ignatova, alias the “Cryptoqueen”, founder of the Ponzi OneCoin, who is still actively sought, by the FBI in particular.
TechAint 