The head of a crypto trading platform that defrauded thousands of investors of almost a quarter of a billion dollars has been sentenced to nine years in prison after pleading guilty to commodities fraud.
In February, Eddy Alexandre, former CEO of a trading platform known as EminiFX Inc., pled guilty to one count of commodities fraud. The plea was in connection to a scheme that, between September 2021 and May 2022, involved soliciting over US$248 million from more than 25,000 retail investors to invest in automated crypto trading that promised high returns.
“Specifically, Alexandre falsely represented to investors that they would double their money within five months of investing by earning at least 5% weekly returns on their investment using a ‘robo-advisor assisted account’ to conduct trading,” U.S. authorities alleged.
However, U.S. authorities found that Alexandre diverted at least US$14.7 million of investors’ funds to his own bank account. Of the money that was invested, Alexandre lost millions of dollars that was not disclosed to investors, they said.
“Alexandre’s fraud was brazen and included fabricating weekly investment returns of at least 5% out of thin air and falsely claiming to use artificial intelligence trading technology that did not even exist,” said Damian Williams, U.S. attorney for the Southern District of New York (SDNY), in a release.
In addition to the prison sentence, Alexandre was ordered to pay US$248.8 million in forfeiture and US$213.6 million in restitution, and sentenced to three years of supervised release by U.S. district court judge John Cronan.