--- title: "Shockingly, Crypto Project That Promised 5% Returns Per Week Turned Out to Be a Ponzi Scheme" description: "According to a new report, cryptocurrency company EminiFX collected a quarter of a billion dollars from investors before being exposed as a Ponzi scheme." date: "2022-07-23" modified: "2022-07-23" authors: - name: "Victor Tangermann" job_title: "Senior Editor" link: "https://futurism.com/authors/victor" url: "https://futurism.com/crypto-project-5-percent-returns-ponzi-scheme" categories: - "Blockchain" - "Cryptocurrency" - "Future Society" tags: - "blockchain" - "cryptocurrency" - "ponzi schemes" - "scams" --- # Shockingly, Crypto Project That Promised 5% Returns Per Week Turned Out to Be a Ponzi Scheme ![According to a new report, cryptocurrency company EminiFX collected a quarter of a billion dollars from investors before being exposed as a Ponzi scheme.]() *\Image: Futurism\* Back in May, the FBI took EminiFX founder Eddy Alexandre [into custody]() after accusing him of fraud. In June, the Justice Department and Commodity Futures Trading Commission [accused his cryptocurrency company EminiFX]() of being a Ponzi scheme, arguing that it had cheated $59 million out of thousands of investors. And now, according to a preliminary report, it sounds like the company made out with far more money than initially thought, collecting a staggering $250 million from around 62,000 user accounts between September 2021 and May 2022, [*The Washington Post* reports](). It's a high-profile example of a crypto venture seemingly being exposed for what it truly is: a scam. It certainly [wouldn't be the first](). Still, if the allegations are true, it does stand out for its mendacity. "This is like no other case I've followed," wrote *WaPo* columnist Michelle Singletary. EminiFX promised investors returns of at least five percent a week, which should already raise innumerable red flags, using what it claimed to be a proprietary trading system that it claimed invested money on foreign exchange markets. But investigators soon caught on to the ruse, discovering that it was most likely using funds from investors to pay other investors, a hallmark sign of a Ponzi scheme. There was even a "multilevel marketing aspect" to EminiFX's operations, according to Singletary, rewarding those who recruit others with bonuses. While returns remained positive every week, "I haven’t found any investing activity to support those returns," David Castleman, a lawyer from Raines Feldman LLP, who filed the preliminary report, told *WaPo*. This is where the story gets even wilder. Many of the investors — or victims — are from Haiti, and are standing behind Alexandre, who was born there. A [petition on Change.org]() has already been signed by almost 14,000 EminiFX investors. The users saw the returns, but never opted to cash out so they could reinvest the amount for future returns, which is exactly what allows a Ponzi scheme to operate. "Many users appear to never have withdrawn or redeemed funds," Castleman noted in a report, as quoted by *WaPo*. Worse yet, Castleman found that there was no evidence that the propriety investment system even existed. It's a devastating story that appears to illustrate an age-old lesson: if it sounds too good to be true — *especially* in the chaotic world of crypto — it's probably a scam. The fact that Alexandre still has substantial support from his victims only adds to the heartbreak. **READ MORE:** [The FBI says it busted a big crypto Ponzi scam. It just got bigger.]() ## Author I've been at Futurism since 2017, where my role has evolved to encompass design, writing, and increasingly editing. I've always been fascinated by space exploration and advanced transportation, which I've leaned into by interviewing luminaries in those fields while closely following the dimensions of policy and regulation that allow next-generation projects to succeed -- or, sometimes, to fail. I'm also keenly interested in the effects of generative AI on society, policies, and democratic institutions, as well as clean energy, physics and biology, and the vagaries of tech leadership. My work for Futurism has been cited by publications including Ars Technica, Gizmodo, PC Magazine, Jalopnik, Fox News, and the New York Post. I spent my childhood living in locations including Manila, the Philippines, and Geneva, Switzerland, attended McGill University, and now live in Toronto, Canada. Before Futurism I worked at AskMen and a small photography studio. In my free time, I'm an avid gardener, foodie, and craft beer lover, as well as a maker of artisanal hot pepper sauces. I have a magnificent dog named Freida. ### Author social links [Bluesky]()