The Commodity Futures Trading Commission (CFTC) has launched a civil enforcement action against William Koo Ichioka, a New York resident, accused of defrauding roughly 100 users, including holders of crypto assets, for more than $21 million.
The Fraudulent Scheme Unveiled
According to the CFTC report, from 2018 to November 2021, Ichioka orchestrated a fraudulent scheme called Ichioka Ventures. During this period, he lured individuals into contributing tens of millions of dollars with the promise to trade digital asset commodities like Bitcoin (BTC) and Ethereum (ETH) and engage in Forex trades via the Ichioka Ventures commodity interest pool.
The proposition was a short-term investment, promising a 10% return on investment every 30 days. Ichioka assured participants that their funds could be readily withdrawn or reinvested.
Nevertheless, Ichioka failed to fulfill his promise, misappropriating more than $21 million from non-family investors and approximately $40 million from his family. The funds were used to repay other participants and for personal luxuries, including cars, jewelry, and rent, violating investor protection laws.
To hide the scheme, Ichioka doctored financial statements and reports to inflate the value of assets he possessed, and furnished fraudulent documentation to potential investors.
Ian McGinley, the director of Enforcement, said, “The CFTC will relentlessly pursue individuals who defraud public investors in digital assets and retail foreign currency [forex] transactions. We aim to hold such culprits fully accountable for their misconduct and work with our law enforcement partners to protect unsuspecting fraud victims.”
Facing the Legal Music
Ichioka has admitted guilt to the CFTC’s charges, agreeing to a proposed consent judgment. The CFTC is striving to reimburse all defrauded participants in the Ichioka Venture community pool.
Additionally, they seek a civil monetary penalty, a permanent trading and registration ban, and permanent injunctions against Ichioka to prevent further violations of the Commodity Exchange Act (CEA) and CFTC regulations.
Beyond the CFTC, the United States Attorney’s Office for the Northern District of California has filed a criminal complaint against Ichioka, with the Securities and Exchange Commission (SEC) also taking action.
The CFTC highlighted the significance of verifying a company’s registration with the relevant authorities before investing funds. They also urged the public to report any suspicious activities or violations of commodity trading laws.