Crypto Founders Sentenced to Decades in Prison for $100M Ponzi Scheme

The U.S. District Court for the Southern District of Florida has imposed a $130 million penalty on the founders of EmpiresX, a cryptocurrency investment platform, for their role in a fraudulent scheme that defrauded investors of over $100 million.

The founders, Nicholas Giudice and Craig J. Lewis, were charged with conspiracy to commit wire fraud and conspiracy to commit money laundering. They pleaded guilty to the charges in December 2024 and were sentenced on February 14, 2025.

The court found that EmpiresX was a Ponzi scheme, with the founders using new investor funds to pay off earlier investors. The platform promised high returns on investments in cryptocurrencies, but the returns were actually generated by new investments rather than any legitimate trading activity.

The founders also allegedly used fake trading statements and other deceptive practices to lure investors into the scheme. The court noted that the founders' actions caused significant harm to investors, many of whom lost their life savings.

The $130 million penalty includes a $100 million fine and $30 million in restitution to be paid to the victims of the scheme. The founders will also serve prison sentences of 10 and 12 years, respectively.

The case is part of a broader crackdown on fraudulent cryptocurrency schemes by U.S. authorities. In recent months, the CFTC has overhauled its enforcement division to better combat fraud without burdening legitimate market participants. The agency has also expressed concern about the potential for market manipulation on meme coin launchpads like Four.meme.

The rise of token launchpads has drawn regulatory scrutiny, with the UK's Financial Conduct Authority (FCA) warning against platforms like Pump.fun. The FCA cautioned that these platforms may be operating in violation of financial laws and could be enabling harmful live streams that mislead and manipulate retail investors.

As the cryptocurrency market continues to evolve, regulators are increasingly focused on preventing manipulation and protecting investors from bad actors. The recent events surrounding EmpiresX and other fraudulent schemes serve as a stark reminder of the need for clear regulations and oversight in the industry.