CFTC supports proposal by EminiFX receiver for sale of estate digital assets
The Commodity Futures Trading Commission (CFTC) has informed the Court that it supports the proposal by the receiver of EminiFX that estate digital assets be sold in a managed liquidation process.
The Commission’s investigation determined that EminiFX customers and potential customers were told, prior to the customers’ making deposits, that they would receive guaranteed returns of at least 5% “every single week” on their contributions. Therefore, customers contributed funds to EminiFX after representations that they were making a safe investment and that their money would not be at risk.
The Commission did not uncover evidence that customers were told that their money would be held in volatile digital assets that could potentially lose much or all of their value. Because customers contributed to EminiFX after being told that their money would be safe, the Commission supports placing estate assets into a safe investment vehicle until they can be distributed.
Let’s recall that the CFTC announced its action against Eddy Alexandre and his company, EminiFX, Inc in May 2022. The CFTC charged the defendants with fraudulent solicitation and misappropriation in connection with soliciting clients to trade Forex, commodity futures contracts, and cryptocurrencies.
The complaint alleges that since at least September 2021 to the present, the defendants solicited and accepted at least $59 million from hundreds of people to purportedly trade Forex and cryptocurrencies, as well as futures and options, in an investment club. The defendants guaranteed customers returns of 5% per week.
In fact, the defendants’ used only approximately $9 million of customers’ funds to trade forex and cryptocurrency in an account in Alexandre’s name. Alexandre lost nearly 70% of that amount —approximately $6.2 million—through unprofitable trading and fees.
The complaint alleged the defendants also misappropriated substantial amounts of the remaining customer money by sending it to accounts in Alexandre’s name, using it to pay other customers in a Ponzi-like scheme, and using it for Alexandre’s personal expenses.