Within the last month regulators in the U.S. have charged or claimed to have busted a few different crypto Ponzi Schemes ranging from a few million to hundreds of millions of dollars. Those behind these schemes have ranged from a single person to a whole team of individuals working together to defraud investors and ranged from victims being just in the U.S. to victims across the world. Of the three big ones that have broken since the end of July only one has been resoundingly accepted as a Ponzi Scheme while the other two have their supporters who are crying foul for the arrests/warrants out for developers' arrests. 

NBD Eidetic Capital, LLC and SR Private Equity, LLC

Late last week the CFTC filed a civil enforcement against Rathnakishore Giri. In their filing the CFTC claims Giri posed as a successful Bitcoin trader and had his Ponzi Scheme victims deposit a total of $12 million and 10 Bitcoins into his two companies, NBD Eidetic Capital, LLC, and SR Private Equity, LLC, to invest and trade. Instead of doing this though Giri utilized the funds in the two companies to bankroll his lavish lifestyle. While this is not the biggest scheme in terms of value the number of investors who fell victim to this hit 150 people.

Unlike other cases, the filing against Giri and his parents is not criminal and is civil. This means that if regulators win the court case as it currently is Giri would not go to jail rather he would have to pay back all of the money he stole. It is quite possible that before this trial plays out that Giri could be charged by various agencies depending on the jurisdiction or jurisdictions that the crimes were committed. At the time though it is a rare example of when the government will utilize the civil court system instead of the criminal court system to freeze an individual's actions and attempt to get investors their money back.

Forsage

Forsage is a decentralized smart chain platform that was launched in January 2020 and quickly grew to be one of the most popular dapps at the time at one point consuming nearly 25% of Ethereum's gas. As you would expect is one of the most popular dapps meant that for two years now regulators around the world have been investigating and/or ordering the platform to shut down. The way that it functions is built like a classic Pyramid or Ponzi Scheme. It encouraged individuals to send money via its Ethereum, Tron, or Binance Smart Chain contracts and recruit others to join. When people got others to join they would receive a payout. This led to more and more people needing to be recruited so that the platform could issue more and more payouts. At the time of the indictment, the SEC stated that $300 million had been swindled away by eleven people.

Regulators had been raising alarm across the world since 2020 however, they ran into an issue with how promoters of the platform, those that were earning massive payouts for recruiting more people, were quick to create Youtube and other videos/infographics that defended Forsage. Of the eleven people charged in with the crime, four were the founders whose locations are not currently known. Of the remaining seven three reside in the U.S. and two of them have already reached an agreement with the SEC that is pending court approval. These agreements with the SEC did not require those charged to admit fault rather they are paying a large sum to not face the possibility of jail. 

Since the blockchain is not something that you can just flip a switch on and off the platform is still operating and still has an active Twitter. This is showing not only the SEC but governments and regulators across the globe the issues that future regulation will run into and does not provide an easy or simple explanation. For the remaining four promoters it will be interesting to see if they try to fight their cases or if they will follow the other two promoters who have already settled. 

EminiFX

Depending on how everything plays out Eddy Alexandre could have a movie made about him and what he has done. Alexandre, the Haitian-born, owner of EminiFX has been charged with running a Ponzi Scheme however many of his investors do not believe that he has done this. According to these investors, who launched a change.org petition, he is a victim of racist prosecution. It is believed that part of the disconnect between his investors and authorities lies in that they have not tried to redeem their funds and that most of his victims are located in Haiti and so they continue to stand behind him and believe in him. 

The issue though is that no matter how you look at it what he has stated he has earned people is nothing short of impossible. Alexandre claims to have created a proprietary trading system that involved both cryptocurrencies and FOREX trading. This system according to him would earn someone at least 5.01% back each week with up to 9.99% a week possible. While the company has now been shut down it was able to operate from November 2021 to May 2022. In a crazy misjudgment by U.S. authorities and regulators they thought that roughly $59 million have been taken in by the company however with the forensic investigation now wrapping up it turns out that over $250 million had been invested through roughly 62,000 accounts. 

When investigators looked into the investments that were made it was found that hardly any of the money, just a few million, was invested and that people working at the company had no idea how the returns were generated. Making matters worse there was no sign of any sort of proprietary trading software, code, or data bank. With over $250 million brought in throughout the company's life the $35 million that was withdrawn was easy to pay off. The total of all of the trading balances on EminiFX though is $512 million a far cry from what is there. All of the company's accounts including ones abroad that held Bitcoin only have a total value of $170 million meaning that of the $250 million brought in roughly $200 million has been accounted for and $312 million more is owed to investors. It does not look promising according to investigators that any other additional money exists that could help reduce the huge difference owed. 

Even with all of this information out there and investors being made aware of what happened and the issues with the company's finances, some investors continue to support Eddy Alexandre. During his appearances in a New York Court investors from places like Boston have driven to watch and support the man that they think has radically changed their life for the better. It is because of this that this case has captured some people's attention as it has with me. The issue at the end of the day is that the balance that individuals are reading on their computer is not actually real and instead is just a number there that cannot be redeemed. 

Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

Robinhood

Robinhood is offering a great signup deal if you use my link here where we will both be awarded free stock. All that you have to do is sign up and connect your bank account for the award! With commission-free crypto trading and the ability to set limit orders, it is a great hybrid offering in my opinion! Not to forget the addition of wallets and the ability to send and receive crypto!

Fold App

Offers daily wheel spins to win free sats daily! If you sign up for Fold with my link here you will get 5,000 sats for free!  

Unstoppable Domains

Sign up using my link here and get a free $10 credit towards your first $40+ purchase! 

Coinbase

Sign up for Coinbase and earn $10 of free Bitcoin when you buy or sell $100 in crypto with my referral here!

SMiles

If you are like me and walk to work every day this app rewards your walking with Sats! So far I have earned over 6,000 sats in just a couple of months walking to work! Here is my link!