CFTC wins $36m victory in California crypto fraud case

New York resident William Koo Ichioka has agreed to pay $36 million in a lawsuit filed with the CFTC alleging cryptocurrency and forex fraud.

According to a Sept. 20 memorandum, U.S. District Court Judge Vince Chhabria for the Northern District of California ordered Ichioka to pay $31 million in restitution to investors for a crypto fraud scheme that began in 2018. Judge Chhabria also imposed a $5 million fine on the Commodity Futures Trading Commission.

Ichioka reportedly began raising millions of dollars from investors six years ago, promising 10% returns every 30 business days. The former San Francisco resident falsified financial statements and bank accounts to support his claims.

The CFTC said Ichioka invested the funds in digital assets and currency positions, but also spent investor money on personal luxury expenses. Prosecutors cited luxury apartments, watches, jewelry and expensive cars financed with money entrusted to Ichioka. The combination of funds and fraudulent practices meant investors never saw a return.

Crypto scrutiny by regulators like the CFTC continues to advance as Capitol Hill debates potential legislation overseeing the growing industry. The CFTC recently settled a digital asset derivatives case with Uniswap, the largest decentralized exchange on Ethereum (ETH).

On September 19, federal prosecutors charged two men with the theft of $243 million. The two were part of a trio that defrauded a Genesis creditor of more than 4,000 Bitcoin (BTC).