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CFTC Secures Over $64 Million Judgment Against EmpiresX in $100 Million Investment Scheme
A federal court has ordered unregistered commodity pool operator Empires Consulting Corp. (EmpiresX) to pay more than $64 million in fines and restitution for operating a massive trading scam.
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The U.S. District Court for the Southern District of Florida has entered a consent order requiring Empires Consulting Corp., which operated under the name EmpiresX, to pay $64,356,794 in total monetary sanctions. The penalty resolves civil enforcement claims brought by the Commodity Futures Trading Commission (CFTC) regarding a multimillion-dollar fraudulent scheme involving digital assets and commodity pools.
According to the court order, Empires Consulting operated unregistered commodity pools, commingled participant funds, and defrauded investors out of approximately $100 million. The total sanction includes $32,178,397 in restitution alongside an identical civil monetary penalty of $32,178,397. The firm is also permanently barred from future violations of the Commodity Exchange Act and related CFTC regulations.
The regulatory action originated in a June 2022 complaint filed against the Florida-based corporation, its founders Emerson Pires and Flavio Goncalves, and head trader Joshua Nicholas. Starting around September 2020, the operation used its official website and promotional videos on social media to solicit members of the public to invest in commodity futures, options, and digital assets.
EmpiresX marketed two main methods of participation: a private investment pool account allegedly managed directly by the company's head trader, and an automated trading pool driven by a proprietary algorithm known as the EX Bot. However, court findings revealed that the company systematically misled prospective investors regarding its regulatory registration status, the true size of the pools, the actual investment returns, and how deposited capital was utilized.
In addition to commingling and misappropriating investor deposits, EmpiresX stopped honoring user withdrawal requests in or around November 2021. The scheme also prompted parallel civil and criminal enforcement actions by the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). While the SEC resolved its corporate claims in 2023, CFTC litigation against the individual defendants remains ongoing.
The CFTC advises prospective investors to exercise caution and always verify an entity's registration status using the National Futures Association (NFA) BASIC database prior to transferring funds to any commodity or digital asset trading platform.