A federal court judge has fined a New York resident $36 million for allegedly swindling crypto investors by promising high returns and using the funds to support his lavish lifestyle.
According to a Sept. 20 statement published by the Commodity Futures Trading Commission (CFTC), US district court judge Vince Chhabria ordered William Koo Ichioka “to pay $31 million in restitution” to victims of the fraudulent crypto and foreign exchange (forex) scheme. He is also required to pay an additional $5 million civil monetary penalty.
CFTC highlights falsely promising significant returns
The CFTC stated that Ichioka started the scheme in 2018, accepting money from investors and falsely promising them “10% returns every 30 business days.”
It further claimed that while Ichioka did invest “some funds” into foreign currencies and crypto as promised to investors, he “commingled” investor money with his own money, using it for his own personal expenses, including, “rent for his personal residence, jewelry, including watches, and luxury vehicles.”
The decision comes over a year after the court “entered an initial consent order of permanent injunction against Ichioka,” in August 2023. At that time, the regulator banned him from “from trading in any CFTC-regulated markets and from registering with the CFTC.”
Regulators prioritize crackdown on false return promises
Individuals falsely promising high returns in crypto have been on regulators’ radars in recent times. On May 18, the Department of Justice (DoJ) charged crypto personality Thomas John Sfraga with wire fraud after promising “the victims returns on their investments as high as 60% in three months.”
Meanwhile, in February, crypto trading course instructor Brian Sewell faced charges from the Securities and Exchange Commission (SEC) for misleading 15 students into investing a combined $1.2 million in a hedge fund that promised to generate lucrative returns.
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The amount of money lost by crypto investors to scammers continues to rise each year.
On Sept. 9, Cointelegraph reported that Americans lost $5.6 billion due to cryptocurrency fraud in 2023, up 45% from 2022. Citing a report from the US Federal Bureau of Investigation (FBI) Internet Crime Complaint Center, crypto-related complaints represented 10% of the total received but almost 50% lost that year.
The report found that of the 69,000 crypto-related complaints the FBI received in 2023, people over 60 were most often victimized, accounting for almost $1.6 billion of the losses.
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