Luxury Watches, Cash, and a $228M Lesson in Crypto Fraud

A U.S. federal judge has ordered Eddy Alexandre, founder of the now-defunct crypto platform EminiFX, to pay more than $228 million in restitution after ruling that the company operated as a Ponzi scheme defrauding tens of thousands of investors. The judgment, handed down by Judge Valerie Caproni in the Southern District of New York, holds Alexandre and EminiFX jointly and severally liable for the restitution and imposes an additional $15 million in disgorgement, with the court noting that any restitution payments would offset Alexandre’s disgorgement obligation [1].

The court ruling follows a series of legal actions against Alexandre and EminiFX, which launched in 2021 and promised investors weekly returns of 5% to 9.99% through a “Robo-Advisor Assisted Account.” The platform claimed to use automated trading strategies in crypto and forex markets but, in reality, sustained significant net losses and never deployed the technology it advertised [1]. Investigators found that Alexandre siphoned off at least $15 million for personal use, including luxury purchases and cash withdrawals, while using funds from new investors to meet withdrawal requests from earlier ones [1]. The company raised over $262 million in just eight months before collapsing under scrutiny and legal pressure.

In May 2022, prosecutors and the U.S. Commodity Futures Trading Commission (CFTC) filed parallel actions against EminiFX and Alexandre. In a separate criminal case, Alexandre pleaded guilty to commodities fraud and was sentenced to nine years in prison and ordered to pay $213 million in restitution [1]. The civil case, now concluded with Caproni’s ruling, adds a parallel mandate for restitution and disgorgement, further underscoring the legal and financial consequences for operating a fraudulent trading platform.

In a separate but related development, the court-appointed receiver overseeing the recovery and distribution of EminiFX assets has already begun disbursing funds to victims. A distribution plan, approved in January 2025, enabled the first payments to be made earlier this year. The receiver recently secured a court order compelling Alexandre to turn over assets, including two luxury watches purchased with EminiFX funds and $5 million in unaccounted cash [2]. Alexandre is also required to provide access to his Gmail account and laptop for further investigation. The court warned that failure to comply could result in civil contempt, potentially leading to imprisonment that would not count toward his existing criminal sentence [2].

The EminiFX case highlights a growing trend of fraudulent activity in the crypto industry, with losses from scams, hacks, and exploits reaching $2.47 billion in the first half of 2025, according to CertiK [1]. While the second quarter of 2025 saw a 52% drop in value lost and 59 fewer incidents compared to the first quarter, the total for the year remains 3% higher than in 2024 [1]. The case also underscores the importance of regulatory vigilance and enforcement as the sector continues to attract both innovation and criminal activity.

The ruling and subsequent court actions reflect the broader regulatory and enforcement landscape shaping the digital asset market. The U.S. Treasury has increasingly targeted cryptocurrency exchanges and networks facilitating illicit activity, as seen in recent sanctions against Garantex and its successor Grinex, among other entities [5]. These actions illustrate the growing international focus on curbing crypto-related fraud and money laundering, particularly as the industry evolves and expands. The EminiFX case serves as a stark reminder of the consequences for those who exploit the complexity and innovation of the digital asset space for personal gain at the expense of investors.

Source:

[1] EminiFX founder to pay $228M in Ponzi scheme ruling (https://cointelegraph.com/news/court-orders-eminifx-founder-repay-228m-ponzi-scheme)

[2] EminiFX receiver secures Court order compelling Eddy Alexandre to turn over assets (https://fxnewsgroup.com/forex-news/retail-forex/eminifx-receiver-secures-court-order-compelling-eddy-alexandre-to-turn-over-assets/)

[3] 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)

[4] Cryptocurrency scams: 8 crypto cons to avoid (https://www.britannica.com/money/cryptocurrency-scams)

[5] Treasury Sanctions Cryptocurrency Exchange and Network of Companies Facilitating Illicit Finance (https://home.treasury.gov/news/press-releases/sb0225)

[6] NEWS: International banking groups push back against crypto rules (https://www.amlintelligence.com/2025/08/news-international-banking-groups-push-back-against-crypto-rules/)