Proposed Distribution Plan

On August 9, 2024, the Receiver filed with the Court a proposed distribution plan (the “Proposed Plan”), which can be found HERE (English Version).  The Proposed Plan filed by the Receiver sets out, among other items:

• The framework for how EminiFX User Claims will be calculated

o    Only Verified or Resolved Transactions shall be used
o    ROI, Bonuses, and Internal Transfers will not be counted

• How distributions to EminiFX Users will be calculated using the “Rising Tide” method
• The Distribution method and eligibility issues

The Plan must be approved by the Court before it can go into effect. These are the important dates relevant to the Proposed Plan:
 

DATE	EVENT
August 9, 2024	The Receiver filed the Proposed Plan, including a brief in support HERE (English Version)
August 14, 2024	The Receiver’s virtual Town Hall on the Proposed Distribution Plan is available at https://youtu.be/p5c8PHjEZTc
August 26, 2024	User responses to the Proposed Plan must be submitted on the User Portal. No person may file a response or a reply directly with the Court unless such person has filed a motion to intervene that has been granted by the Court.
September 10, 2024	User responses anonymized by the Receiver and filed with the Court HERE. Alexandre filed a response with the Court HERE.
September 27, 2024	CFTC filed a reply brief with the Court HERE. Receiver filed a reply brief with the Court HERE.

 

Distributions will not occur until the Proposed Plan is approved, and users are able to validate their payment information and resolve any remaining disputed transactions using the new User Portal 2.0, which the Receiver expects to release sometime in October 2024. All users will receive an email when User Portal 2.0 is launched.

 

Disclaimer:  The description of the Proposed Plan herein presumes that it will be approved as filed.  Any Plan of Distribution that is approved may be materially different than the Proposed Plan, in which case this website will be updated.  This page is provided merely as a resource to summarize the Proposed Plan, and is not intended to affect any provision as stated therein, which is the sole and complete statement of the Proposed Plan.  To the extent there is any perceived discrepancy between this page and the Proposed Plan, the Proposed Plan filed with the Court controls.

Town Hall
A town hall to discuss the Proposed Plan, held on the Receivership’s YouTube channel on August 14, 2024, can be found here: https://youtu.be/p5c8PHjEZTc.

How and When to Provide Plan Feedback 

All feedback was required to be submitted via the User Portal on or before August 26, 2024. The Receiver compiled that feedback and filed it with the Court on September 10, 2024. A copy of that filing can be found HERE.

EminiFX User Claims and User Portal 2.0

The Proposed Plan will finalize how EminiFX user claims are calculated.  EminiFX user claims are going to consist of the Verified and Accepted deposit transactions on your User Portal Transaction Log.  Similarly, the Verified and Accepted withdrawal transactions on your User Portal Transaction Log will be used to calculate the amount of your distribution.  The transactions represent actual funds into EminiFX, and actual funds out of EminiFX.

Claims Do NOT Include ROI, Bonuses, and Internal Transfers:  EminiFX user claims will not consist of the ROI, will not consist of the various referral and other bonuses, and will not consist of internal transfers between users.  The ROI, bonuses, and transfers do not represent the payment or transfer of actual funds into EminiFX, and thus will not be included in users’ claims under the Proposed Plan.

The Receiver expects to launch User Portal 2.0 around October 2024.  The website and log-in information will be the same, but the transactions will be updated to show the result of the Receiver’s initial review.  All users will be given the opportunity to provide payment information in User Portal 2.0, which the Receiver will use for any distributions that are made to that user.  Users with transaction disputes will also be given opportunities to resolve those disputes (see below for more detail).  Users will receive further instructions about User Portal 2.0 at a later date.

 

Distribution Calculation – Rising Tide

The Proposed Plan seeks approval of a “rising tide” formula for calculating distributions.  This means that your distribution is calculated based on your total pre-receivership deposits, and your total pre-receivership withdrawals are counted against that calculation.  Essentially, the Proposed Plan treats pre-receivership withdrawals the same as post-receivership distributions, because both are made from the same pool of commingled funds.

If the Proposed Plan is approved, the Receiver will set an initial rising tide percentage shortly after approval.  From time to time, as the Receiver believes it is prudent to release reserves, the Receiver may increase that percentage.  When the Receiver increases the percentage, users who already received distributions will generally be eligible for supplemental distributions.

Distribution = (Total Deposits x Rising Tide %) – (Withdrawals + Prior Distributions)

This is an example of how rising tide works for four different users, all of whom have $10,000 in deposits, but different withdrawal amounts.  In this example, the rising tide percentage starts at 30% and is then increased to 50%.  This example—which is only an example and not an indication of the rising tide percentages that will be used in this case—shows how the goal of rising tide is to try to make the total of withdrawals plus distributions as even as possible for users who deposited the same amount.

 

Sample User	Receiver Distribution 1 30% Rising Tide	Receiver Distribution 2 50% Rising Tide	Sum of Receiver Distributions	Sum of Withdrawals and Receiver Distributions
User A Deposits            $10,000 Withdrawals      $0	$3,000	$2,000	$5,000	$5,000
User B Deposits            $10,000 Withdrawals      $2,000	$1,000	$2,000	$3,000	$5,000
User C Deposits            $10,000 Withdrawals      $4,000	$0	$1,000	$1,000	$5,000
User D Deposits            $10,000 Withdrawals      $8,000	$0	$0	$0	$8,000

The other commonly used distribution calculation is net investment, which subtracts withdrawals from deposits, and calculates distributions pro rata using a percentage of that net amount.  For users who did not withdraw, that percentage will be lower than a rising tide percentage for the same amount of total dollars distributed.  For example, a user who deposited $10,000 and withdrew $0 would receive $3,000 under a rising tide percentage of 30%, but would receive $2,500 under a net investment percentage of 25%.

The Receiver believes that rising tide is fairer than the net investment method, because users who withdrew funds pre-receivership did so from the same commingled pot of funds that will be used to make distributions post-receivership.  In addition, users who made withdrawals pre-receivership have had access to those funds since 2022.

 

Distribution Method and Timing

Once the Proposed Plan is approved, and the 45-day period for users to respond to disputed transaction has passed, the Receiver will shortly thereafter set an Initial Rising Tide Percentage.  Once that happens, the Receiver and his team will begin processing distributions to eligible users who have provided valid payment information on the User Portal 2.0.

A user will be eligible for a distribution under the Proposed Plan if the following conditions are met:

• The Court has approved the Distribution Plan
• The User’s account has no disputed transactions remaining
• The User has provided valid payment information
• The Receiver has set a Rising Tide Percentage
• The User’s verified withdrawals (if any) divided by verified deposits are below the Rising Tide Percentage
• The User’s account is not subject to a further review hold (this will not affect most users)

The Receiver will provide options for electronic payments via services such as Paypal, Venmo, Zelle, or ACH, or for check payments to be sent via mail to a U.S. address.  Overseas users who cannot receive payment in any of these ways will be able to contact the Receiver for additional assistance.  Once Portal 2.0 is released, the Receiver encourages all users to provide their payment information as soon as they can.

If the above conditions are met, the Receiver expects to commence the first distribution by the end of 2024 and into 2025.  The Receiver expects to make more than one distribution, and there is a substantial likelihood that the Initial Rising Tide Percentage will be increased at some point in the future.  However, the timing or amount of future distributions is unknown at this time.

Disputed Transactions and Objections

The Receiver and his team are continuing to review the thousands of submissions on the User Portal in preparation to launch Portal 2.0.  We are targeting to launch Portal 2.0 in October 2024.

These are the most common categories of disputed transactions that users whose transactions have not been verified can expect to see:

• Seeking ROI/Bonuses  A user is seeking to add ROI or a multilevel marketing bonus.  These are disallowed transactions under the Proposed Plan.  A user will be given the opportunity to provide evidence that the user is seeking an actual deposit.
• Insufficient Documentation:  The Receiver does not have enough documentation to support adding the disputed transaction to the log.  Users will have a chance to provide additional documentation or explanation using User Portal 2.0 the change or addition of a contribution.  
• Duplicate Transaction or Different Owner:  A user is attempting to claim a transaction that is already on their transaction log (duplicate transaction) or was assigned to another user and is on that user’s transaction log (different owner).
•  Inter-User Dispute:  A user sent money to another user outside of EminiFX and there is no evidence that the money was deposited into the EminiFX system.  This situation may happen when a user who deposited on behalf of another user did not reassign a verified deposit.
• Transfers Not Recognized:  A user received  transferred funds within the EminiFX system from another user, rather than any funds moving into the EminiFX system.

Users will be given the option to accept some or all of the Receiver’s determinations in the User Portal 2.0, without challenging or objecting to the dispute.  In many cases, when a user accepts all of the Receiver’s determinations, that user’s account will become eligible for distribution—unless there are other issues, which the Receiver belies will impact only a limited number of users.

 

Other Potential Issues with EminiFX User Claims

Liens on Claims:  There may be some cases in which a third party is able to place a legal lien on a claim.  The Receiver will post a form on the website for anyone placing a lien to submit, along with any necessary documentation.  There will likely be a processing fee to submit a lien, as well as a charge on any distribution itself.  Affected claimants will be given notice of any such lien and an opportunity to respond.

Deceased Claimants:  There will unfortunately be some cases in which claimants pass away at any point in the claims and distribution process.  The Receiver will post a form on the website for the deceased’s representatives to submit to transfer the claim to the deceased’s estate, along with any necessary documentation.  The Receiver and his team will work with affected representatives on any documentation or other issues to the extent possible.

Review Holds:  There may be some limited instances in which an account is held for further review, typically because the account is either that of an EminiFX insider, or the holder of the account also has a net winner account.  The Receiver may request consolidation, subordination, or other type of litigation-related offset.  All such review holds will expire on June 30, 2025, unless the Receiver has made a demand or initiated a process with the Court.  In general, the Receiver expects to reach out to any affected user to attempt to resolve the hold, if possible.

OFAC/Compliance:  The Receiver is legally obligated to comply with all applicable laws when transferring money, including regulations issued by the Office of Foreign Assets Control (OFAC).  The Receiver and his team will work with any impacted claimants to the extent possible.

 

Frequently Asked Questions

Q.    When am I getting a distribution?

A.    If your claim does not have any disputed transactions, and you provide valid payment information, our goal is to commence initial distributions at the end of 2024 and into 2025.  However, the Proposed Plan must be approved first, and under the Proposed Plan any pre-receivership withdrawals will be subtracted from the distribution amount.  Once we launch Portal 2.0 (target date: October 2024), you will be able to input your payment information, and we will use Portal 2.0 to announce distribution percentages and amounts.  

Note:  A very small number of users may have their claims held for further review.  This is uncommon.  For those users, the Receiver and his team will work with affected users to resolve issues arising from the hold.  That process will take time, but all review holds will expire automatically on June 30, 2025 if the Receiver has not sent a demand or filed a motion with the Court.

 

Q.    What do I need to do to get a distribution?

A.    If you have no disputed transactions, all you need to do is provide us with valid payment information.  You will have the ability to do that when we launch Portal 2.0 (target date: October 2024), and the Receiver encourages you to choose an electronic payment option for faster payment.  If you have disputed transactions, you will be able to work with the Receiver’s team to resolve those disputes, and you will also have an option to choose to accept the Receiver’s recommendations.  If your claim is held for further review—which is highly unlikely for the vast majority of users—the review hold will need to be resolved before a distribution can be made.

 

Q.    How much will the rising tide percentage be?

A.    The Receiver will set the initial rising tide percentage only if the Proposed Plan is approved, and users have had a chance to provide payment information and validate their transactions on Portal 2.0.  The Receiver expects this to be the first of multiple distributions.  The Receiver cannot at this time state what the initial rising tide percentage will be, but he will file a notice of the set percentage prior to commencing distributions.  The Receiver expects to periodically increase the rising tide percentage as issues in the receivership are resolved and it is safe to do so.  When that happens, the Receiver will make supplemental distributions to eligible users.

 

Q.    Why aren’t you just subtracting withdrawals from deposits and doing a percentage of that?

A.    The Receiver does not believe that method of distribution (commonly called “net investment”) is appropriate for EminiFX.  Because the Receiver maintains that EminiFX operated as a Ponzi-like scheme, withdrawals were paid from a pool of all users’ funds.  Because of that, using the “net investment” method of distribution, which would result in some users receiving more from EminiFX than other users, would be unfair to investors who did not withdraw, but whose deposits were used to fund other users’ withdrawals.

 

Q.    Why aren’t you counting ROI and Bonuses?

A.    The Receiver has undertaken a detailed analysis of ROI and bonuses and found that they were fictitious.  They were not connected to any investment returns – in fact, EminiFX lost money almost every week.  (Click HERE for the weekly EminiFX performance figures.)  Because ROI was not real, and only paid out pre-receivership funds using other users’ deposits, the Receiver does not believe it is appropriate to use ROI as the basis for any user’s claim.

 

Q.    I received a transfer from another user.  Why doesn’t that count toward my claim?

A.    When a user received a transfer from another user, that is not money coming into the EminiFX system.  The user who deposited the original funds should have received a credit for that deposit, and we cannot double count it by also giving credit to the user who received a transfer.  And, if there was any ROI or bonuses included in that transfer, those were fictitious profits and not real.  Therefore, we cannot count transfers toward a user’s claim.  However, our Claims Procedures state that nothing in this process is intended to limit a user’s right as against third parties.

 

Q.    What if I paid another user or gave them money to deposit?

A.    That user had the opportunity when using User Portal 1.0 to add members to transactions that were actually the deposits of other users.  The Receiver will have a tool available in User Portal 2.0 for users to transfer their deposits to other users, but only if there is an inter-user dispute or an objection based on the Receiver not recognizing internal transfers.  The Claims Procedures also state that nothing in this process is intended to limit a user’s right as against third parties.

 

Q.    What is the “Convenience Class” and why am I in it?

A.    A large percentage of users deposited a relatively small amount of money, as compared to other users.  Because the rising tide percentage will be increased over time, the incremental distributions to those users would be very small amounts.  The Proposed Plan provides that the Receiver does not have to make distributions if the amount to be distributed is less than $50.  For users who deposited less than $1,000, the Receiver is going to set a one-time percentage that is not expected to ever be increased, and those users will get a single up-front distribution.  This will reduce the costs on the receivership and will eliminate the need for most very small distributions.