Federal Judge Orders Over $36M Penalty in Crypto Fraud Case

A federal judge has ordered Koo Ichioka William, a 30-year-old New York resident, to pay $36.4 million for his involvement in a forex and digital asset fraud scheme, according to the U. S. Commodity Futures Trading Commission (CFTC).

The fraud, which began in 2018, saw Ichioka raise millions of dollars from investors by promising them a lucrative 10% yield every 30 working days.

His claims, however, were based on falsified financial statements and manipulated bank records, which gave investors the illusion of legitimate returns.

The CFTC noted that while some of the funds were invested in forex and digital asset commodities, Ichioka spent a significant amount of the funds on his expenses, including rent for his residence, jewellery, watches, and luxury vehicles. 

Crypto Fraudster Ordered to Pay Over $36M

The verdict was given by Judge Vince Chhabria of the U. S. District Court for the Northern District of California who ordered the defendant to pay over $31 million in restitution to defrauded investors and imposed an additional $5 million penalty.

The ruling follows Ichioka’s admission in June 2023 to defrauding investors by fabricating financial documents and making false promises about investment returns in digital assets. 

In addition to the financial penalties, Ichioka was sentenced to 48 months in prison for related criminal charges, including commodities fraud and wire fraud. He was also barred from trading in any CFTC-regulated markets or registering with the regulator, prohibiting him from any future violations. 

According to the CFTC, that order and the monetary penalty mark the end of its enforcement action against the New York resident.

CFTC Clamps Down on Crypto Fraud 

The last incident marks a significant step forward in the regulator’s ongoing efforts to clamp down on fraud within the rapidly evolving cryptocurrency market.

“The CFTC also strongly urges the public to verify an individual or company’s registration with the CFTC before committing funds. If unregistered, a customer should be wary of providing funds to that company or individual,” the agency said. 

Earlier this year, the CFTC awarded $1 million to a whistleblower who provided crucial information that led to action against a company involved in improper trading within the crypto market.