Judge Orders $228M Restitution in EminiFX Ponzi Scheme Scandal

A New York federal judge has declared EminiFX, a cryptocurrency investment platform, a Ponzi scheme, ordering its founder, Eddy Alexandre, to pay over $228 million in restitution. The ruling, issued by Judge Valerie E. Caproni, marks the conclusion of a civil case brought by the U.S. Commodity Futures Trading Commission (CFTC) against Alexandre and his company. This decision adds to a series of legal actions following Alexandre’s guilty plea in 2023 and a nine-year prison sentence for commodities fraud in a related criminal case. The court also imposed an additional $15 million in disgorgement for funds Alexandre personally extracted from the scheme, including expenses for luxury cars and cash withdrawals [2].

Launched in 2021, EminiFX promised investors weekly returns of between 5% and 9.99% through an automated trading system it claimed was powered by a “robo-advisor.” Investors were led to believe the platform could generate consistent returns in cryptocurrency and foreign exchange markets. However, court filings revealed the system was entirely fictitious. Instead, the platform relied on a classic Ponzi scheme model—using funds from new investors to pay off returns to existing participants. Over the course of eight months, the platform raised approximately $262 million from over 25,000 individuals, many of whom were recruited through Alexandre’s connections in the church and Haitian-American community [3].

According to court documents, the company suffered at least $49 million in losses and failed to deliver on its promised returns. Alexandre withdrew more than $15 million for personal use, further exacerbating the scheme’s instability. The CFTC and federal prosecutors had filed parallel civil and criminal cases against Alexandre in May 2022, resulting in both financial penalties and incarceration. The civil judgment clarifies that any restitution payments Alexandre makes will reduce his required disgorgement obligations [2].

The court-appointed receiver has been actively working since 2022 to trace and recover assets linked to EminiFX. Earlier this year, the first distribution of recovered funds was approved and sent to investors. The scale of this case has drawn significant regulatory attention, underscoring the growing scrutiny of unregistered cryptocurrency platforms that operate under false pretenses. The CFTC’s actions highlight the agency’s commitment to enforcing legal standards in the rapidly evolving crypto market [3].

The case also reflects broader trends in financial enforcement, particularly in the wake of increasing fraudulent schemes in the cryptocurrency sector. As regulators continue to tighten oversight, the high-profile nature of the EminiFX case may serve as a deterrent to would-be fraudsters. The outcome demonstrates the judiciary’s willingness to impose significant financial penalties alongside criminal sentencing, reinforcing the message that deceptive investment practices will not go unpunished. The restitution order alone could set a precedent for future cases involving high-profile crypto fraud, signaling stronger enforcement in an industry still grappling with regulatory challenges [2].

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[1] Founder of Purported Artificial Intelligence-Powered Hedge Fund Sentenced to 30 Months (https://www.justice.gov/usao-edny/pr/founder-purported-artificial-intelligence-powered-hedge-fund-sentenced-30-months)

[2] Crypto Fraudster, Fund Liable for $229 Million in CFTC Suit (https://news.bloombergtax.com/financial-accounting/crypto-fraudster-fund-liable-for-229-million-in-cftc-suit)

[3] Federal Judge Declares EminiFX a Ponzi Scheme, Orders $228M in Restitution (https://cryptopotato.com/federal-judge-declares-eminifx-a-ponzi-scheme-orders-228m-in-restitution/)

[4] Federal Judge Rules EminiFX a $228M Ponzi Scheme (https://www.btcc.com/en-US/square/Global%20Cryptocurrency/860666)