Originally published on: August 20, 2024
A cryptocurrency fund called Ikigai Strategic Partners has been hit with a $150,000 fine by the National Futures Association (NFA) in the United States for an illicit Bitcoin loan. The fine comes as a result of an alleged unauthorized advance of pool assets to an affiliate by Ikigai Strategic Partners, according to a decision made by an NFA hearing panel on August 20.
The incident is linked to the liquidity crisis that rocked the crypto industry following the collapse of the FTX exchange in 2022. The NFA, which regulates the derivatives market in the United States, is cracking down on activities in the spot cryptocurrency markets.
According to the NFA, Ikigai Strategic Partners loaned about $2.5 million worth of BTC to a crypto exchange in 2022 to benefit another fund owned by the same individuals who run Ikigai. This loan violated regulatory obligations and resulted in Ikigai being unable to meet redemption demands from its investors.
The NFA alleges that Ikigai used the Master Fund’s Bitcoin as collateral for a $1.3 million US Dollar Coin (USDC) line of credit extended to an affiliated fund, Ikigai Capital Partners GP LLC.
As part of the settlement, Ikigai and its principal operator agreed to pay the $150,000 fine without admitting or denying the allegations. Recent NFA rules have been implemented to govern the conduct of member firms operating in the spot cryptocurrency markets, with a focus on regulating fraudulent and misleading claims.
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