- Fake founder of crypto and foreign exchange platform pleads guilty.
- Con artist did not touch most of the funds he had scammed from investors.
- More scam cases continue to pop up in the crypto space.
Scammers are coming up with more ways to cart away money in the crypto space, and there are more cases of individuals pretending to be investors or CEOs to have the perfect getaway for scamming people.
The most recent is fake CEO Alexandre Eddy who pretended to be the founder of a phony crypto and foreign exchange platform EminiFX to defraud investors and successfully gained over $250 million from investors through scam tactics.
While pleading guilty to his crimes, the fake CEO admitted to scamming his victims with the guarantee of weekly returns of 5% on their investments while convincing them to trust him with their finances with a made-up tale of using Robo-Advisor Assisted account to conduct the trading, which his victims had believed.
The con artist was often quoted as calling his technology a trade secret, hence his refusal to let investors in on what the technology was. The truth of the matter was the technology did not exist.
The evident lie did not stop him from posting weekly income statements that supposedly showed the steady growth of his investors.
However, out of the money Alexandre scammed from his investors, he only moved $14.7 million into his account, which in hindsight, was to his advantage, he didn’t do anything with the money left, and he did not invest it either.
When the fake investor tried investing the money he had stolen, he incurred millions of dollars in losses even on the limited portion of the money he had chosen to support, all of which he kept away from his investors.
The difference between this fake CEO and other CEOs like SBF of FTX is that he didn’t mishandle a large portion of the funds he had taken from his investors, which is in massive contrast to Sam-Bankman Fried, who was accused of misappropriating $10 billion worth of customers assets and allegedly lost $8 billion of it which may have gone into funding his extravagant lifestyle.
The trend of scammers making up companies or pretending to be investors to scam customers and investors alike of their money is not one that just began. Last week, a web three co-founder claimed that he had crypto stolen out of his trust wallet while in a meeting with scammers who had pretended to be investors.
A large part of his story revolved around the scammer constantly holding meetings with the company and even showing up to the meeting, as mentioned above, with his banker to show they were a legitimate investor. Still, in the end, they had stolen from the Webverse co-founder without even needing to gain access to his private key.
As the crypto space continues to grow, like all traditional financial spaces, there will be more scammers seeking to steal from investors and crypto firms alike, hence the need for more secure platforms to be created to protect investors and consumers.