Crypto Founder Slapped with $228M Fine for Elaborate AI Ponzi Scam
Crypto's dark underbelly gets exposed—again.
Another day, another nine-figure crypto scandal. This time it's an AI-powered Ponzi scheme that promised algorithmic trading miracles but delivered nothing but vaporware and empty wallets.
The $228 Million Reckoning
Regulators just dropped the hammer—hard. The founder behind this so-called AI trading platform must now cough up a staggering $228 million in penalties. That's not just a slap on the wrist; it's a full-body financial tackle.
Fake AI, Real Consequences
The platform claimed to use cutting-edge artificial intelligence to generate guaranteed returns. Spoiler: it didn't. The 'AI' was about as real as a three-dollar bill—just fancy marketing buzzwords draped over a classic Ponzi structure. New investor funds paid old investors until the whole house of cards collapsed.
Why This Stings Extra Hard
Nothing burns crypto credibility quite like grifters hijacking legitimate tech trends. AI's actual potential gets overshadowed by these snake oil salesmen—giving ammo to every skeptic who says crypto's just a high-tech Wild West.
Another 'innovative' financial product that innovated exactly one thing: how fast it could separate fools from their money.
EminiFX’s Fake AI Scam
Crypto crime may be at an epidemic level right now, but major frauds from the past also tend to pop back up.
Two years ago, EminiFX founder Eddy Alexandre was sentenced to prison for commodities fraud. Today, the CFTC won another victory over EminiFX, ordering Alexandre to pay a massive fine for the scam:
“The CFTC seeks restitution on behalf of EminiFX’s investors in the amount of $228,576,962, which is the amount of money contributed to the company by EminiFX investors minus withdrawals. Simply put, EminiFX was a Ponzi scheme, and investors’ decisions to give their money to Defendants were predicated entirely on fraudulent misrepresentations,” the court order read.
EminiFX was ostensibly a CEX and forex business, but its real scam proved somewhat ahead of its time. Alexandre claimed that the platform used a sophisticated AI protocol to double investor yields.
In reality, the business was a Ponzi scheme, using future investments to keep early adopters on the hook.
A Scheme Ahead of Its Time
Several of EminiFX’s scam tactics are much more common now. In 2025, AI-powered tools are enabling many scams, with AI-generated code used to drain wallets and sophisticated deepfakes facilitating social engineering.
Alexandre used the promise of AI as a confidence scam, but the technology wasn’t a Core component. Apparently, he didn’t use AI at all, spending investor money on personal bills and risky trades that lost $49 million.
Additionally, EminiFX specifically targeted Haitian-Americans in New York City to invest in the scam. Today, NYC’s immigrant populations are a frequent target of organized scammers, who run social media campaigns to attract low-information victims.
These tactics may be common in the scam world now, but EminiFX is finished. The US government has a diminished capacity to pursue crypto criminals, but the CFTC can still score big wins.
In addition to his ongoing prison sentence, Alexandre will have to refund $248 million of investor money. He’s also been ordered to pay $15 million in fines, but his reimbursements will count towards this total. Apparently, this latter fine is insurance; he’ll be criminally liable if he can’t pay this penalty.
There’s an ongoing battle against a new generation of crypto criminals, but justice was done in this instance.
