Eddy Alexandre, crypto and forex platform CEO, pleads guilty to $248M fraud scheme

Eddy Alexandre, the CEO of the supposed crypto trading website EminiFX, has pled guilty to commodities fraud in a New York district court, promising to repay millions of dollars to investors who lost money as a result of his “cryptocurrency investment hoax.”

Eddy Alexandre, 51, of Valley Stream, New York, was arrested in May 2022 and charged with wire fraud and commodities fraud, to which he pleaded not guilty at first. However, according to court documents, Eddy Alexandre will change his plea in a new hearing scheduled for Friday afternoon.

Eddy Alexandre ‘you can run, but you can’t hide’

The United States Department of Justice (DOJ) announced on February 10 that Alexandre pleaded guilty to one count of commodities fraud and would pay over $248 million in the forfeiture and unspecified reparations.

According to U.S. Attorney for the Southern District of New York Damian Williams, Eddy Alexandre controlled the crypto and FX trading platform from roughly September 2021 to May 2022 and “solicited more than $248 million in investments from tens of thousands of individual investors.”

According to authorities, Eddy Alexandre, who was a longtime cybersecurity engineer before founding EminiFX, lured investors into his fraud by promising to double their money within five months and generating 5% weekly profits through a hidden robo-advising technology.

In actuality, however, the CEO did not invest a “significant amount” of the cash and “even used some assets for personal expenditures.” Instead, Eddy Alexandre promoted EminiFX as a passive income platform that automated trading in cryptocurrencies and foreign currencies using a “guaranteed” hidden new technology.

Alexandre declined to disclose the nature of the technology to investors, but assured them that their investment would be doubled within five months. Authorities claim that he maintained the deception by sending clients with false account statements indicating that their money grew between 5 and 10 percent per week.

The aftermath of fraud investment

In truth, Alexandre lost millions of dollars on the funds he did invest, a fact he concealed from investors. In addition, he transferred approximately $14.7 million to his personal bank account and used approximately $155,000 to purchase a BMW and more to make payments on a Mercedes-Benz.

Eddy Alexandre is also facing a second civil suit from the Commodity Futures Trading Commission, which accuses him of “fraudulent solicitation and misappropriation” in relation to cryptocurrency and foreign exchange trading.

Despite the allegations of fraud against Alexandre, many of his clients have remained to support him. At Alexandre’s plea hearing last year, supporters traveled from all over the world to cheer him on, telling Bloomberg that EminiFX was legitimate, Eddy Alexandre was helping them, and the prosecution against Alexandre, who is Black, was racist.

The disreputable businessman’s ultimate sentencing before a judge is expected on July 12. The maximum sentence for the crime of commodities fraud is 10 years in prison. However, Alexandre could face up to 30 years in prison without a plea bargain.

In a letter delivered in open court, Alexandre admitted to neglecting to inform existing and future EminiFX users that certain “aspects” of his platform were not completely working from September 2021 to May 2022. In addition, at the prosecutor’s request, Eddy Alexandre revealed that he was aware that the artificial intelligence software he claimed to have used as part of his “marketing strategy campaign” did not function.

According to court documents, the guilty plea was submitted just weeks before Alexandre’s jury trial was to begin. In confessing his guilt, Alexandre conceded that he had no plausible defense if he went to trial in late March, as was originally anticipated.

Cryptocurrency and NFT rug pulls have been an increasing concern within the blockchain space, with over US$25 billion across over 500 fraudulent projects lost so far, according to data from software and technology information site Comparitech.