New York Man Fined $36 Million for Defrauding Crypto Investors

A federal judge has ordered a New York man to pay $36 million after he allegedly defrauded cryptocurrency investors by promising unrealistic returns while using their money to finance his luxurious lifestyle.

On September 20, the U.S. Commodity Futures Trading Commission (CFTC) announced that Judge Vince Chhabria mandated William Koo Ichioka to provide $31 million in restitution to his victims, alongside a $5 million civil penalty. The CFTC revealed that Ichioka initiated his fraudulent scheme in 2018, claiming he could deliver 10% returns every 30 business days.

While he did invest some funds in foreign currencies and cryptocurrencies, he mismanaged investors’ money for personal expenses, including rent, luxury items, and expensive cars. This ruling follows a previous injunction in August 2023 that barred him from trading in CFTC-regulated markets.

Regulatory scrutiny on false return promises has intensified recently. For instance, Thomas John Sfraga was charged with wire fraud for claiming he could provide investors with returns of up to 60% in three months. Additionally, Brian Sewell faced SEC charges for misleading students into investing in a hedge fund with inflated return claims.

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The trend of increasing financial losses due to crypto scams remains concerning. A report indicated that Americans lost $5.6 billion to cryptocurrency fraud in 2023, a 45% rise from the previous year. The FBI found that those over 60 were particularly vulnerable, accounting for nearly $1.6 billion of the total losses.

Kosta Gushterov