EminiFX Founder Ordered to Pay $228 Million in Restitution for Ponzi Scheme

According to Cointelegraph, a federal judge in New York has mandated Eddy Alexandre, the founder of the now-defunct cryptocurrency platform EminiFX, to pay over $228 million in restitution. This decision follows the court's determination that EminiFX operated as a Ponzi scheme, defrauding tens of thousands of investors. The U.S. Commodity Futures Trading Commission (CFTC) achieved a summary judgment against Alexandre and EminiFX, with U.S. District Judge Valerie Caproni holding them jointly responsible for the restitution amount and an additional $15 million in disgorgement. The court's ruling comes more than three years after Alexandre was initially charged and over a year following his guilty plea in a related criminal case. EminiFX, which launched in 2021, quickly amassed over 25,000 investors, raising more than $262 million within eight months. The company falsely promised weekly returns ranging from 5% to 9.99% through a "Robo-Advisor Assisted Account," which purportedly utilized automated trading strategies in cryptocurrency and forex markets. However, court documents revealed that the platform incurred net losses of at least $49 million and never implemented the advertised technology. Investigations uncovered that Alexandre diverted at least $15 million for personal expenses, including credit card payments, luxury vehicles, and cash withdrawals. Investor withdrawals were funded using commingled funds from new participants, a hallmark of Ponzi schemes. Alexandre's legal troubles began in May 2022 when prosecutors and the CFTC initiated parallel actions. In the criminal proceedings, he confessed to commodities fraud and received a nine-year prison sentence, along with a $213 million restitution order. The civil case, now concluded with Judge Caproni's order, imposes a parallel restitution and disgorgement requirement, although any restitution payments will offset his disgorgement obligation. The court-appointed receiver, tasked with managing the recovery and distribution of assets since 2022, commenced disbursing recovered funds to victims earlier this year after a distribution plan was approved in January. Meanwhile, losses from cryptocurrency hacks, scams, and exploits have reached $2.47 billion in the first half of 2025, as reported by CertiK. Although the second quarter saw $800 million lost across 144 incidents—a 52% decrease in value and 59 fewer hacks compared to the first quarter—the total losses for the year have already increased by nearly 3% from 2024.