FBI Arrests CEO of NY-Based Crypto Platform for Alleged Fraudulent Scheme

Key Insights:

• The CEO of a crypto and forex trading platform is charged with a fraudulent scheme.
• Eddy Alexandre promised 5% weekly returns for its investors.
• The case is being handled by the Office’s Securities and Commodities Fraud Task Force.

Eddy Alexandre, the CEO of cryptocurrency trading platform EminiFX, has been arrested by the FBI on a charge of commodities and wire fraud.

According to an official announcement from the US Department of Justice, Alexandre ran a fraudulent crypto investment and trading platform and managed to solicit $59 million in investments from hundreds of customers, between September 2021 and May 2022.

False promises and luxury items

Alexandre reportedly made false promises offering high return potential and specifically claimed that the platform’s users would become millionaires within a few years if they invested $100,000.

Commenting on the case, US Attorney Damian Williams said that “in reality, no such technology existed, as Alexandre is alleged to have invested very little of their money – most of which he lost – and transferred most of it to his own personal accounts to pay for luxury items for himself.”

FBI Assistant Director-in-Charge Michael J. Driscoll said:

“As alleged, Mr. Alexandre solicited millions of dollars from unwitting investors to whom he ‘guaranteed’ weekly returns of 5% through his trading platform using a new technology he refused to disclose. As with many greedy actors who have preceded him, he then used significant portions of the investor funds he solicited to buy expensive luxuries for himself.”

Alexandre reportedly transferred at least $14.7 million of investors’ funds to his personal bank accounts, instead of investing it as promised. The announcement further revealed that he spent $155,000 in investor funds to buy a BMW car for himself and $13,000 on car payments.

Crypto-related crime continues to proliferate

As reported earlier today, some users of the Web3 crypto wallet MetaMask have fallen victim to a phishing attack, with a number of popular crypto websites being affected. Those include CoinGecko, DeFiPrime, and DexTools, among others.

Etherscan warned:

🚨 We’ve received reports of phishing popups via a 3rd party integration and are currently investigating.

Please be careful not to confirm any transactions that pop up on the website.

— Etherscan (@etherscan) May 13, 2022

Last week, City of London police were investigating “crypto muggings” in London, where victims had reportedly lost thousands of pounds in cryptocurrency.

Criminals were targeting people’s crypto investments handled on smartphones by either luring them from the owners or applying physical force to gain access to accounts.

In March, the US Securities and Exchange Commission charged siblings John and JonAtina Barksdale in a $124 million fraud scheme involving a digital token called “Ormeus Coin.” The official press release read:

“[…] the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world, even though they abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue. As alleged, in many of these investor communications, the defendants falsely stated that Ormeus Coin had a $250 million crypto mining operation and was producing $5.4 million to $8 million per month in mining revenues.”