A New York man has been fined $36 million by a federal judge for deceiving crypto investors with promises of high returns while misusing the funds for personal luxury.
On Sept. 20, the Commodity Futures Trading Commission (CFTC) announced that William Koo Ichioka was ordered by US District Court Judge Vince Chhabria to pay $31 million in restitution and an additional $5 million civil penalty for his fraudulent crypto and forex scheme.
False Promises of Significant Returns
Ichioka began the scheme in 2018, misleading investors by guaranteeing "10% returns every 30 business days." While some funds were invested in foreign currencies and crypto, Ichioka mixed the investors' money with his own, using it for personal expenses like rent, luxury watches, and vehicles.
The ruling follows a previous injunction from August 2023 that permanently banned Ichioka from trading in CFTC-regulated markets.
Regulatory Crackdown on False Return Promises
Regulators have been increasingly focused on Individuals falsely promising high crypto returns. In May, the US Department of Justice (DOJ) charged Thomas John Sfraga with wire fraud for promising returns of up to 60% in three months. Similarly, in February, instructor Brian Sewell was charged with misleading investors into a hedge fund that promised high returns.
Crypto fraud is on the rise, with Americans losing $5.6 billion in 2023-an increase of 45% from 2022, according to the FBI. Most victims were over 60, accounting for nearly $1.6 billion in losses.
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