Judicial Authority labels EminiFX as a Ponzi Scheme, orders $228 million in Compensation for Victims
In a landmark ruling, a New York federal court has declared the EminiFX cryptocurrency investment platform a Ponzi scheme. The judgment, secured by the US Commodity Futures Trading Commission (CFTC), brings additional clarity to one of the most prominent crypto frauds of the past three years.
EminiFX, launched in 2021, was the brainchild of Eddy Alexandre. However, his ambitions came crashing down in 2022 when the CFTC imposed additional financial penalties on him through a civil lawsuit. The court documents revealed that Alexandre amassed over $228 million in damages as the founder of EminiFX, a sum that now hangs over his head as restitution payments.
Alexandre is currently serving a nine-year prison sentence for commodities fraud and swindling nearly $250 million from over 25,000 investors. His prison term began after he pleaded guilty in a separate criminal case, charged more than three years ago.
The civil ruling adds further financial penalties to the $213 million restitution order from the criminal proceeding. Alexandre's investors came from his own circles, including his church and the Haitian community, lured by promises of weekly profits between 5% and 9.99%. Court filings, however, show that the promised technology never existed.
Alexandre used his influence to win trust and even enlisted fellow members to recruit participants. The company operated by recycling new investor funds to pay existing participants, resulting in losses of at least $49 million. Alexandre withdrew at least $15 million from EminiFX for personal expenses, including luxury cars, credit card payments, and cash withdrawals.
A receiver appointed by the court has been working since 2022 to trace and recover funds linked to EminiFX. The restitution payments made by Alexandre will offset his disgorgement obligation. Earlier this year, the first round of recovered money was returned to investors after a distribution plan received judicial approval.
Recovery efforts continue for thousands of investors who lost funds in the EminiFX scheme. A distribution plan for recovered funds has received judicial approval, providing a glimmer of hope for those affected by this financial tragedy. US District Judge Valerie Caproni issued the order declaring EminiFX a Ponzi scheme, marking a significant step towards justice for the victims.
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