Judge Rules Against Crypto Platform and Its Founder

A federal judge in New York has ordered Eddy Alexandre, founder of the collapsed crypto platform EminiFX, to repay more than $228 million after ruling the company operated as a Ponzi scheme that defrauded tens of thousands of investors.

US District Judge Valerie Caproni, ruling in favour of the Commodity Futures Trading Commission (CFTC), found Alexandre and EminiFX jointly liable for $228,576,962 in restitution. Alexandre has also been ordered to pay an additional $15,049,500 in disgorgement. The ruling follows more than three years of investigations and comes over a year after Alexandre admitted to commodities fraud in a separate criminal case.

How the Scheme Operated

EminiFX was launched in 2021 and managed to raise more than $262 million in just eight months by attracting over 25,000 investors. The company promised weekly returns of between 5 and 9.99 per cent through what it described as a “Robo-Advisor Assisted Account”, allegedly powered by automated trading strategies in crypto and forex markets.

Court documents reveal that these trading tools never existed. Instead, the company sustained net losses of at least $49 million, while Alexandre diverted at least $15 million for personal use. The funds were spent on luxury cars, credit card bills and cash withdrawals. Like many Ponzi schemes, withdrawals for earlier investors were paid using deposits from new participants.

Criminal Case and Prison Sentence

The civil ruling comes alongside Alexandre’s criminal conviction. His downfall began in May 2022 when both prosecutors and the CFTC launched actions against him. In the criminal proceedings, Alexandre pleaded guilty to commodities fraud and was sentenced to nine years in prison. He was also ordered to pay $213 million in restitution.

Judge Caproni clarified that payments Alexandre makes toward restitution will offset his disgorgement obligations under the civil case.

Asset Recovery and Victim Compensation

A court-appointed receiver has been managing the recovery and distribution of assets since 2022. Earlier this year, after a distribution plan was approved, the receiver began compensating victims with funds recovered from the scheme. Thousands of investors are still awaiting repayment as the process continues.

Rising Losses in Crypto Scams and Hacks

The EminiFX case highlights the persistent risks in the cryptocurrency sector. According to blockchain security firm CertiK, losses from crypto-related hacks, scams and exploits reached $2.47 billion in the first half of 2025. While incidents in the second quarter dropped compared with the first quarter, the overall total is already nearly 3 per cent higher than in 2024.

The scale of the EminiFX fraud, along with ongoing concerns about market integrity, underscores the continued pressure on regulators to clamp down on misleading investment schemes within the rapidly evolving crypto industry.