CFTC Wins $36 Million Fine Against Crypto Fraudster

The US Commodity Futures Trading Commission (CFTC) has secured a $36 million-dollar fine against forex and digital asset scammer William Koo Ichioka. This development comes amidst rising levels of crypto fraud losses over the last year.

Crypto Investment Scammer Gets Prison Sentence And Fine 

In June 2023, the US Department of Justice filed a lawsuit against William Ichioka with accusations of wire fraud, false tax returns as well as securities and commodities fraud. This civil action was based on an original complaint by CFTC against the defendant.

According to the commodities market regulator, Ichioka launched a fraudulent virtual assets investment scheme in 2018 where he accepted capital from unsuspecting investors with the promise of 10% profit every 30 working days. Investigations by the CFTC revealed that Ichioka did invest some of these funds in the forex and crypto market. However, the defendant had also mingled investors’ capital with his own personal funds. 

Furthermore, the New York resident also utilized these funds to settle personal desires in terms of rent, jewelry, and extravagant cars. To keep the fraudulent scheme ongoing, Ichioka continuously declared false asset valuation, alongside fake account statements.

In August 2023, the US court placed an initial consent order of injunction against Ichioka barring the accused from engaging in all CFTC-regulated markets or breaching any regulations enforced by the Commodity Exchange Act (CEA) or CFTC. 

A year following Ichioka’s indictment, Judge Vince Chhabria of the US District Court for Northern California has entered a $36 million fine against the crypto scammer, which he is directed to pay in the form of $31 million as restitution to victims and $5 million as a civil penalty. In addition, Ichioka is mandated to spend 48 months in prison followed by an extra five years of supervised release.

Crypto Fraud Remains A Major Concern 

Despite the impressive growth and development of the digital asset ecosystem in the past few years, the existence of hacks, scams, and frauds remains a big source of worry for prospective investors. 

Recently, Bitcoinist reported that losses due to crypto fraud rose by 45% to $5.6 billion in 2023 according to data from the Federal Bureau of Investigation. Interestingly, investment scams similar to that by Ichioka were responsible for 71% of these reported losses. Consequently, there is a need for improved security solutions and public education on legitimate cryptocurrency use and operations.

At the time of writing, the total crypto market is valued at $2.1 trillion with the market leader, Bitcoin, boasting a price of $63,136 per unit.