According to Cointelegraph, a federal judge in New York ordered Eddie Alexander, the founder of the now-defunct EminiFX cryptocurrency platform, to pay over $228 million in restitution. This ruling comes after the court determined that EminiFX was operating as a Ponzi scheme, deceiving tens of thousands of investors. The U.S. Commodity Futures Trading Commission (CFTC) obtained a summary judgment against Alexander and EminiFX, with federal judge Valerie Caproni holding them jointly liable for the restitution amount along with an additional $15 million in damages.
The court ruled after more than three years since charges were first brought against Alexander and over a year after he pleaded guilty in a related criminal case. EminiFX, which started in 2021, quickly attracted over 25,000 investors and raised more than $262 million within eight months. The company falsely promised weekly returns ranging from 5% to 9.99% through a 'robotic advisor-supported account,' which claimed to use automated trading strategies in cryptocurrency and forex markets. However, legal documents revealed that the platform incurred net losses of at least $49 million and did not implement the advertised technology.
Investigations revealed that Alexander diverted at least $15 million for personal expenses, including credit card payments, luxury vehicles, and cash withdrawals. Investor withdrawals were funded using mixed funds from new participants, a hallmark of Ponzi schemes. Alexander's legal troubles began in May 2022 when the prosecution and CFTC initiated parallel proceedings. In the criminal proceedings, he pleaded guilty to commodities fraud and was sentenced to nine years in prison, along with a restitution order of $213 million. The civil case, which has now concluded with Judge Caproni's order, imposes parallel restitution and recovery requirements, although any restitution payments will offset his recovery obligations.
The court-appointed receiver, tasked with managing the recovery and distribution of assets since 2022, began distributing recovered funds to victims earlier this year after a distribution plan was approved in January. Meanwhile, losses from cryptocurrency breaches, fraud, and exploitation reached $2.47 billion in the first half of 2025, according to CertiK. Although the second quarter saw a loss of $800 million across 144 incidents—a decrease of 52% in value and 59 fewer breaches compared to the first quarter—the total losses for this year have already increased by about 3% compared to 2024.