CFTC Charges Man for Defrauding Investors of $21M in Crypto Ponzi Scheme

CFTC Charges Man for Defrauding Investors of $21M in Crypto Ponzi Scheme – William Koo Ichioka has been accused by the United States Commodity Futures Trading Commission (CFTC) of defrauding investors of tens of millions of dollars under false pretenses as a digital asset and foreign exchange (forex) trader. In an official statement, the CFTC revealed that they have lodged a complaint against Ichioka in the U.S. District Court for the Northern District of California. 

The complaint alleges that Ichioka mishandled more than $21 million of investor funds, employing a Ponzi scheme by using fresh customer deposits to create the appearance of profits. More than 100 individuals and entities were reportedly solicited by Ichioka, as stated by the commodities regulator, who promised to engage in forex trades through a commodity interest pool under the name Ichioka Ventures. 

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Ichioka advertised these services on his website, asserting that the returns he offered were consistent with his own successful investment history, where he had already accumulated millions of dollars. According to his trading strategies, Ichioka guaranteed participants of his scheme a 10% return every 30 business days. However, he incurred substantial losses. 

To conceal these losses, he fabricated documents to artificially inflate the funds in the commodity interest pool accounts, and he provided false statements of accounts to the participants. Additionally, the accused individual used funds from other participants to distribute purported gains to investors, further perpetuating the alleged fraud.

Contrary to Ichioka’s assertions, it has been discovered that he was actually diverting customer funds for personal use. Rather than handling the assets of participants separately, he mingled them with his own and utilized them to acquire luxury items such as jewelry, cars, and watches. 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.”

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“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 and the Department of Justice have begun parallel investigations into Ichioka’s actions, and they are set to be settled soon.

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