The Commodity Futures Trading Commission (CFTC) has filed a civil enforcement action against William Koo Ichioka, for defrauding around 100 users, including crypto asset holders, of more than $21 million.
The fraudulent scheme
According to the CFTC’s report, Ichioka, a resident of New York City, operated a fraudulent scheme from 2018 to November 2021 called the Ichioka Ventures.
During that time, he solicited tens of millions of dollars from individuals, with a promise to trade digital asset commodities such as bitcoin (BTC) and ethereum (ETH), as well as engage in Forex utilizing the Ichioka Ventures commodity interest pool.
The investment was supposed to be short-term, having a 10% return on investment after every 30 days. Participants in Ichioka’s venture pool were also assured that their funds could be withdrawn easily, or reinvested.
However, Ichioka didn’t keep to his promise, misappropriating more than $21 million from non-family investors and around $40 million from his family members. According to the report, he used the funds to pay back other participants and for personal expenses like luxury cars, jewelry, and rent payments, which violates the importance of investor protection laws.
In a bid to conceal the scheme, Ichioka admitted to doctoring financial statements and reports to overstate the value of assets in his possession, and he provided false documentation to prospecting investors.
In a statement about the case, Ian McGinley the director of Enforcement said:
“The CFTC is committed to aggressively pursuing individuals who defraud public investors in digital assets and retail foreign currency [forex] transactions. The CFTC will strive to hold such wrongdoers fully accountable for their misconduct as we work cooperatively with our law enforcement partners to protect unsuspecting fraud victims.”
Legal actions and consequences
Ichioka admitted to being guilty of the CFTC’s charges, agreeing to a proposed consent of judgment. The CFTC aims to fully refund all defrauded participants of the Ichioka Venture community pool.
They are also looking to get a civil monetary penalty, a permanent trading and registration ban, and permanent injunctions against Ichioka for any further violation of the Commodity Exchange Act (CEA) and CFTC regulations.
Aside from the CFTC, the United States Attorney’s Office for the Northern District of California has filed a criminal complaint against Ichioka, and the Securities and Exchange Commission (SEC) has taken action as well.
The CFTC emphasized the importance of verifying a company’s registration with the appropriate authorities before committing funds. They also encouraged the public to report suspicious activities or any violation of commodity trading laws.
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