US Regulator Fines New York Resident $36 Million For Crypto Fraud

According to Cointelegraph, the United States Commodity Futures Trading Commission (CFTC) has fined a New York resident, William Koo Ichioka, $36 million for allegedly defrauding crypto investors by promising high returns and using the funds to support his lavish lifestyle. The CFTC's statement on September 20 detailed that Ichioka is required to pay $31 million in restitution to victims and an additional $5 million civil monetary penalty for operating a fraudulent foreign exchange (forex) and crypto scheme. The CFTC highlighted that Ichioka began the scheme in 2018, accepting money from investors with false promises of “10% returns every 30 business days.” While Ichioka did invest some funds into foreign currencies and crypto as promised, he commingled investor money with his own, using it for personal expenses such as rent, jewelry, and luxury vehicles. This decision follows an initial consent order of permanent injunction against Ichioka in August 2023, which banned him from trading in any CFTC-regulated markets and from registering with the CFTC. Regulators have been prioritizing the crackdown on individuals falsely promising high returns in crypto. On May 18, the Department of Justice (DoJ) charged crypto personality Thomas John Sfraga with wire fraud after he promised victims returns as high as 60% in three months. Similarly, in February, the Securities and Exchange Commission (SEC) charged crypto trading course instructor Brian Sewell for misleading 15 students into investing a combined $1.2 million in a hedge fund that promised lucrative returns. The amount of money lost by crypto investors to scammers continues to rise each year. On September 9, Cointelegraph reported that Americans lost $5.6 billion due to cryptocurrency fraud in 2023, a 45% increase from 2022. A report from the US Federal Bureau of Investigation (FBI) Internet Crime Complaint Center revealed that crypto-related complaints represented 10% of the total received but accounted for almost 50% of the losses that year. The report also 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.