The United States Commodity Futures Trading Commission (CFTC) has charged William Koo Ichioka for defrauding investors of tens of millions of dollars by claiming to be a digital asset and foreign exchange (forex) trader.

According to an official statement, the CFTC filed a complaint against Ichioka in the U.S. District Court for the Northern District of California, accusing him of mishandling over $21 million of investor assets and using new customer funds to create the illusion of profits in a Ponzi scheme.

CFTC Charges Man for Defrauding Investors

The commodities regulator said Ichioka solicited millions from more than 100 individuals and entities, promising to engage in forex trades through a commodity interest pool operating as Ichioka Ventures. While advertising the services on his website, Ichioka claimed that the promised returns aligned with his track record as he was a self-made investor already earning millions of dollars.

Based on his trading strategies, Ichioka had promised participants of his scheme 10% returns every 30 business days. However, he sustained massive losses. To hide the losses, he provided fake documents to inflate the amount of funds in the commodity interest pool accounts and false statements of accounts to participants. The alleged fraudster also paid the purported gains to investors using funds from other participants.

Despite Ichioka’s claims, he was, in reality, misappropriating customer funds for personal expenses. He commingled participants’ assets with his and used them to purchase luxury items like jewelry, cars, and watches.

Parallel Action From the SEC and DOJ

The CFTC accused Ichioka of running an “old-school” Ponzi Scheme and engaging in “garden-variety” fraud. The alleged fraudster has proposed a settlement to resolve the Commission’s charges. On the other hand, the agency is seeking the court’s order to impose trading and registration bans and a monetary penalty on Ichioka.

“Investor education and enforcement actions are critical to our efforts to prevent fraudsters from bilking hard-working investors. Accordingly, I strongly encourage all members of the public to stay informed about the potential scams and abuses in digital assets markets by visiting our investor advisory page. Fraudsters offering guaranteed, or unusually high, returns—or both—should in particular prompt scrutiny and additional diligence before transferring any funds,” Commissioner Kristin N. Johnson said.

Meanwhile, the U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have begun parallel investigations into Ichioka’s actions, and they are set to be settled soon.

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Filed under: Bitcoin - @ June 24, 2023 11:15 am