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U.S. Citizen Accused of $59M Illegal Foreign Exchange Scheme by CFTC

The CFTC has charged Eddy Alexandre, a New York-based U.S. citizen and founder of EminiFX Inc. was charged with a $59M foreign exchange scam scheme.

CTFC Charged a U.S. Citizen for Illegal FX Scheme

The U.S. government has taken similar steps against Alexandre’s corporation, EminiFX Inc. According to the CFTC, Alexandre guaranteed investors a weekly yield of 5% and received nearly $59M from several people for trading F.X. and cryptocurrencies.

According to the CFTC, Alexandre only utilized 9% of his customers’ money for trading forex and cryptos. Via unprofitable trades and fees, he lost $6.2M, or almost 70% of the total. Alexandre also utilized client money for personal expenditures.

According to the lawsuit, the defendants misused considerable quantities of the remaining client funds by depositing them in Alexandre’s name, paying other clients in a Ponzi-like operation, and utilizing them for Alexandre’s purposes. Participants’ money was utilized to pay for Saks Fifth Avenue, BMW, and Mercedes Benz, to name a few examples. 

Additionally, payments were given for airfare, five-star hotels, apparel, and work-related and physical treatment. The CFTC further highlighted that Alexandre utilized a significant amount of participant cash to rent and furnish EminiFX’s office building and conduct galas on EminiFX’s account.

Forex Exchange Fraud Alerts

In the United States, forex and cryptocurrency fraud have resurfaced. The CFTC has already issued multiple F.X. Fraud Advisories to alert investors about illegal operations. Investors should also investigate an individual’s or corporation’s accreditation with the CFTC to determine their legitimacy.

The CFTC has issued fraud advisories to inform clients of these Ponzi schemes, outline simple techniques to identify them, and advise the public of the probable risks connected with investments or speculations in cryptos or recently released BTC futures and options, the CFTC said.

Regulatory Framework in Specific Areas

For the reasons listed below, Giancarlo Lionti thinks the ecosystem requires regulation. Since financial regulators have increased their demands on CFD Brokers, he advocates regulating the Affiliate Marketing program in F.X. & CFD trading.

It’s not uncommon for publishing companies and marketers to disregard the advice supplied by the licensed brokers with whom they engage, and it isn’t fair, in his perspective, for a Broker to face legal and economic consequences for something over which it has no influence.

He went on to say that this will cut down on the amount of time and manpower needed to manage a compliant affiliate company internally, as well as ‘shield both dealers and clients from illegal affiliate activity.’

Similarly, Eduardo Delgado agrees that affiliates must be controlled, but only in certain locations such as the United States and the E.U. He believes that precise regulation of introducing affiliates and brokers improves the company’s transparency and long-term viability. 

Introducing investment managers and brokers that operate outside of government regulation today confronts numerous difficulties. They’re compelled to cooperate with offshore firms, which exposes them and their customers to various hazards, he warned.

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