EminiFX Leader Pleads Guilty to $248 Million FX and Crypto Fraud

Monday, 13/02/2023 | 12:03 GMT by Arnab Shome
  • The platform promised a weekly return of at least 5 percent.
  • It degraded tens of thousands of individual investors.
arrest
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Eddy Alexandre, the mastermind behind the fraudulent forex and cryptocurrency trading platform EminiFX, has pled guilty to soliciting more than $248 million in investments from tens of thousands of investors, the US Department of Justice announced.

EminiFX Mastermind Pleads Guilty

The guilty plea came after the US authorities charged Alexandre last May for false representations about the trading platform and lured investors with bogus promises. The initial charges estimated the investment solicitation by EminiFX to be around $59 million, which has now raised over $248 million.

Alexandre pled guilty to one count of commodities fraud and now faces a maximum prison time of 10 years. In addition, he agreed to forfeit about $249 million and pay restitution to the victims. The court will decide the amount later.

A Massive FX and Crypto Trading Fraud

EminiFX started operations in or about September 2021 and continued until May 2022, when it was busted. The platform 'guaranteed' a weekly return of at least 5 percent, which would double the investments within five months.

Alexandre claimed to be using a “Robo-Advisor Assisted account” for trading and generating massive profits, but was clever enough not to reveal any of the information, referring to the technology as a “'trade secret.”

In reality, the scheme was far from earning an interest of 5 percent for the investors. Alexandre did not even invest a substantial amount of the investors’ funds and even lost 'millions of dollars' of the 'limited portion' of invested funds. He even misdirected $14.7 million of EminiFX customer funds to his personal accounts and used them to purchase luxury cars, among other things.

However, the EminiFX website falsely showed its investors that the profits from the investments were at least 5 percent, which they could withdraw or re-invest. Further, it did not disclose any of the losses to the investors.

“Alexandre’s scam caused investors to lose millions of dollars, and this case should serve as yet another warning to cryptocurrency executives that the Southern District of New York is closely watching and ready to prosecute any and all misconduct in the crypto markets,” said U.S. Attorney Damian Williams.

The Increasing Crypto Fraud

The amount of Cryptocurrency fraud and rug pulls skyrocketed over the years with the rising popularity of the industry. According to Solidus Labs, fraudsters have deployed 211,000 scam tokens since September 2020, and 60 percent of them were launched in 2022.

Scam tokens deployed

The US-based crypto exchanges were mostly exposed to these scams, followed by Seychelles and the Bahamas platforms. Meanwhile, the US securities regulator in December charged four promoters of Forcount Trader Systems, a fraudulent crypto pyramid scheme, for violating the anti-fraud and registration provisions.

Eddy Alexandre, the mastermind behind the fraudulent forex and cryptocurrency trading platform EminiFX, has pled guilty to soliciting more than $248 million in investments from tens of thousands of investors, the US Department of Justice announced.

EminiFX Mastermind Pleads Guilty

The guilty plea came after the US authorities charged Alexandre last May for false representations about the trading platform and lured investors with bogus promises. The initial charges estimated the investment solicitation by EminiFX to be around $59 million, which has now raised over $248 million.

Alexandre pled guilty to one count of commodities fraud and now faces a maximum prison time of 10 years. In addition, he agreed to forfeit about $249 million and pay restitution to the victims. The court will decide the amount later.

A Massive FX and Crypto Trading Fraud

EminiFX started operations in or about September 2021 and continued until May 2022, when it was busted. The platform 'guaranteed' a weekly return of at least 5 percent, which would double the investments within five months.

Alexandre claimed to be using a “Robo-Advisor Assisted account” for trading and generating massive profits, but was clever enough not to reveal any of the information, referring to the technology as a “'trade secret.”

In reality, the scheme was far from earning an interest of 5 percent for the investors. Alexandre did not even invest a substantial amount of the investors’ funds and even lost 'millions of dollars' of the 'limited portion' of invested funds. He even misdirected $14.7 million of EminiFX customer funds to his personal accounts and used them to purchase luxury cars, among other things.

However, the EminiFX website falsely showed its investors that the profits from the investments were at least 5 percent, which they could withdraw or re-invest. Further, it did not disclose any of the losses to the investors.

“Alexandre’s scam caused investors to lose millions of dollars, and this case should serve as yet another warning to cryptocurrency executives that the Southern District of New York is closely watching and ready to prosecute any and all misconduct in the crypto markets,” said U.S. Attorney Damian Williams.

The Increasing Crypto Fraud

The amount of Cryptocurrency fraud and rug pulls skyrocketed over the years with the rising popularity of the industry. According to Solidus Labs, fraudsters have deployed 211,000 scam tokens since September 2020, and 60 percent of them were launched in 2022.

Scam tokens deployed

The US-based crypto exchanges were mostly exposed to these scams, followed by Seychelles and the Bahamas platforms. Meanwhile, the US securities regulator in December charged four promoters of Forcount Trader Systems, a fraudulent crypto pyramid scheme, for violating the anti-fraud and registration provisions.

About the Author: Arnab Shome
Arnab Shome
  • 6417 Articles
  • 84 Followers
About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6417 Articles
  • 84 Followers

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