US resident fined $36 million for 5-year crypto fraud scheme
A New York man has been ordered to pay $36 million for defrauding investors in a cryptocurrency scheme that ran for five years.
On September 20, the Commodity Futures Trading Commission (CFTC) announced that US District Court Judge Vince Chhabria imposed the hefty fine on William Koo Ichioka.
Of the total fine, $31 million will be used to reimburse victims, with an additional $5 million as a civil monetary penalty.
Ichioka's fraudulent activities date back to 2018 when he promised investors a 10% return every 30 business days.
The CFTC revealed that although some funds were invested in foreign currencies and cryptocurrencies, a large portion of the money was used for Ichioka's personal expenses, including luxury items such as jewelry, watches, and vehicles.
The court's decision follows a previous injunction against Ichioka in August 2023, which permanently barred him from trading in markets regulated by the CFTC and from registering with the commission.
Regulators have been increasingly focused on cracking down on individuals falsely promising high returns in crypto investments.
For instance, in May 2023, the Department of Justice charged Thomas John Sfraga with wire fraud for promising his victims a 60% return in three months.
Similarly, in February, the Securities and Exchange Commission charged Brian Sewell, a crypto trading course instructor, with misleading students into investing $1.2 million in a hedge fund.
The rise in cryptocurrency fraud has been alarming.
In 2023, Americans lost $5.6 billion to crypto-related scams, according to the FBI's Internet Crime Complaint Center.
Of the 69,000 complaints received, individuals over the age of 60 were disproportionately affected, losing nearly $1.6 billion to scammers.
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