Cryptocurrency scammer fined $36 million by CFTC for fraud

A federal judge has ordered William Koo Ichioka to pay more than $36 million in restitution and fines for his role in a digital currency and asset fraud, according to announcement by the Commodity Futures Trading Commission (CFTC).

Ichioka gained notoriety for orchestrating a large-scale fraud in which he defrauded more than 100 investors out of tens of millions of dollars by trading cryptocurrencies, securities, and other investment vehicles.

The order was issued Sept. 19 by Judge Vince Chhabria of the U.S. District Court for the Northern District of California. Ichioka is ordered to pay $31 million in restitution to victims and an additional $5 million in civil monetary penalties.

The scam, which began in 2018, saw Ichioka solicit investment funds under false promises of a 10% return every 30 business days. While some of the funds were invested in foreign currencies and digital goods, Ichioka mixed the money with his personal finances.

He used the funds for personal expenses, including luxury items such as jewelry, watches, and luxury vehicles. To conceal his actions, Ichioka provided investors with falsified financial documents and account statements.

In August 2023, Ichioka was banned from trading on any CFTC-regulated markets and from registering with the CFTC by permanent injunction.

In addition, Ichioka faced parallel criminal charges from the Department of Justice, where he pleaded guilty to multiple fraud charges and was sentenced to 48 months in prison. He was also ordered to pay $31 million in restitution and a $5 million fine, in addition to 5 years of supervised release.

The CFTC has stressed the importance of verifying the registration of individuals or companies offering financial services and has warned the public about common signs of fraud in its Commodity Pool Fraud and Forex Fraud advisories. Whistleblowers who report violations may be eligible to receive between 10 and 30 percent of the monetary penalties collected.