FBI Arrests Eddy Alexandre, EminiFX Boss. The slumping cryptocurrency not only has to deal with the recent drop in value, but the authorities are exposing a growing number of crypto crimes that are adding to the industry’s bad name.
The United States (US) tax authorities said they followed 50 separate leads into scams involving non-exchangeable tokens and other aspects of the crypto industry.
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Tax investigators also said as of May 13, 2022, they were pursuing evidence of a $1 billion ponzi scheme or around IDR 14.62 trillion (assuming an exchange rate of IDR 14,629 per US dollar) in the crypto market.
Beware of Crypto Scams
The FBI on May 12 arrested the CEO of New York crypto trading platform EminiFX on one count of commodity fraud and one count of fraud related to an alleged Ponzi scheme that defrauded investors of approximately $59 million.
Eddy Alexandre, 50, of Valley Stream, NY, according to the New York Business Journal, was arrested on charges that can carry a combined maximum sentence of 30 years in prison.
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The FBI complaint alleges that Alexandre from September 2021 to May 2022 solicited more than $59 million in investments from hundreds of individual investors via the website webeminifx.com, guaranteeing they would double their money within five months generating 5 percent to 9.99 percent weekly returns on their investment.
The FBI complaint claims Alexandre’s statements about weekly profits are false and EminiFX is not getting any profit from its investors.
Alleged Modus
Alexandre allegedly marketed EminiFX as an investment platform where investors would earn passive income through automated investments in cryptocurrencies and foreign exchange trading using Robo-Advisor accounts, which he describes as a new technology that is a trade secret, the complaint says.
The complaint says Alexandre received $59 million from people to invest and misdirected $15 million of the funds into his personal checking account.
He allegedly transferred USD 9.04 million or approximately Rp. 132.24 billion to an electronic trading platform that he opened in his name in December 2019, before he founded EminiFX, and suffered trading losses of approximately USD 6.27 million or approximately Rp. 91.72 billion. .
FBI Arrests Eddy Alexandre, EminiFX Boss. He also transferred USD 30,000 or about Rp 438.88 million in investor funds to a digital cryptocurrency wallet account registered in his name, according to the complaint.
Alexandre is suspected of using USD 155,000 or around Rp. 2.26 billion to buy a BMW car, and spending USD 13,000 or around Rp. 190.18 million for other car payments.
This includes USD 10,000 or approximately IDR 146.29 million for a Mercedes Benz, another USD 15,000 or approximately IDR 219.44 million spent on charitable donations and spending other investors’ funds on rent, to provide office space for EminiFX and to host events for company name.
Investor Withdraw Money
Large amounts of investor funds were also used to pay attorneys’ fees, including checks worth USD 100,000 or approximately Rp. 1.46 billion and USD 20,000 or approximately Rp. 292.58 million, each with the word follower written in the subject line, based on the complaint.
Some Investors Can Withdraw Money
While many investors tend to lose money on their EminiFX investments, the FBI complaint says certain investors managed to withdraw funds from the platform.
Bank account activity shows that EminiFX failed to invest a large proportion of investor funds, and it appears that the only way the platform can fund investor withdrawals is to use existing investor funds in classic Ponzi-type schemes.
An FBI investigation found EminiFX received investor deposits in US dollars and received investor funds and also made payments in bitcoin, the complaint said.
Crypto Market Capitalization Drops Due to Selling Action
Earlier, bitcoin briefly fell below $26,000 on Thursday for the first time in 16 months, amid a broader sell-off in the cryptocurrency that wiped more than $200 billion from the entire market in one day. .
Reporting from CNBC, Friday, May 13, 2022, Bitcoin price fell as low as USD 25,401.29 on Thursday, according to Coin Metrics. It marked the first time the cryptocurrency has sunk below the USD 27,000 level since December 26, 2020.
Bitcoin has since pared its losses and was last trading at USD 28,569.25, down 2.9 percent. However, on Friday’s trading (13/5/2022) Bitcoin rebounded again and traded in the range of USD 30,000.
Investors are fleeing crypto at a time when the stock market has fallen from the height of the coronavirus pandemic on concerns over soaring prices and a deteriorating economic outlook.
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FBI Arrests Eddy Alexandre, EminiFX Boss. US inflation data released Wednesday showed prices of goods and services jumped 8.3 percent in April, higher than analysts had expected and near their highest level in 40 years.
Another thing weighing on traders’ minds was also the crash of the embattled stablecoin Terra protocol. Terra USD, or UST, was supposed to reflect the dollar’s value. However, it plummeted to less than 30 cents, shaking investors’ confidence in the so-called decentralized finance space.
The fallout from Terra’s collapse caused fears of market contagion. Economists have long feared stablecoins might not have the amount of reserves needed to increase their dollar peg in the event of a mass withdrawal.
