Federal Judge Greenlights Crypto Asset Turnover for Defendant’s Restitution
On Thursday, May 8, 2025, Judge Vince Chhabria of the US District Court for the Northern District of California issued an order approving a stipulation for the liquidation and turnover of cryptocurrency assets in the case of United States v. Ichioka. The order outlines a plan for the defendant to settle criminal monetary penalties using ARKM cryptocurrency tokens, with the United States Marshals Service (USMS) overseeing the process.
Ichioka had pled guilty to five felony charges related to the scheme, including wire fraud, tax fraud, securities fraud, and commodities fraud. Court documents state that from 2018-2019, Ichioka solicited investments through his company “Ichioka Ventures” by promising returns of 10% every 30 days from trading in cryptocurrencies, securities, and other assets. He obtained over $21 million from more than 100 victims during this period.
However, Ichioka lost money from the portions he did invest and spent victim funds on personal luxuries. He admitted to commingling investor money with his own and using the amounts to purchase high-end vehicles, watches, and jewelry, and cover living expenses rather than making legitimate trades. By late 2019, Ichioka privately acknowledged that the “\[c\]ompany hasn’t made any money since we started.”
The court document details an agreement between the United States and the defendant. The agreement pertains to the transfer and liquidation of approximately 16,958,059 ARKM tokens, which the defendant expected to receive in three equal installments of roughly 5,652,686 tokens in January 2025, January 2026, and January 2027. These tokens were initially intended to be available immediately in those months to pay toward restitution and other penalties. However, Defendant’s civil counsel, Michael W. Goldstein, informed the court that the tokens would instead become available gradually on a block-by-block basis throughout each respective year, from January to December.
Under the terms of the amended judgment, the defendant is required to transfer all ARKM tokens that become available in his cryptocurrency wallet to a USMS-controlled wallet address on a monthly basis, no later than the 15th of each month, until the criminal monetary penalties are fully paid. Goldstein is tasked with executing these transfers and notifying the USMS, Assistant United States Attorney Benjamin Wolinsky, and Financial Analyst Allen Williams via email upon completion of each transfer.
The USMS will take custody of all cryptocurrency tokens that can be immediately liquidated, including ARKM tokens. For any tokens that cannot be liquidated right away due to market conditions, exchange limitations, or other factors, the USMS will evaluate the feasibility and costs of converting them into a liquidable form. Any such conversion will require agreement from both parties before proceeding. The USMS will liquidate the tokens as soon as reasonably possible after receiving them, unless notified by the defendant or the Financial Litigation Program (FLP) of the United States Attorney’s Office that liquidation could result in funds exceeding the defendant’s outstanding penalties. In such cases, the USMS will aim to liquidate only the amount necessary to cover the remaining balance, as determined by the FLP.
Proceeds from the liquidation, after accounting for cryptocurrency exchange transaction fees, will be transferred to the Clerk of the Court via the Intra-Governmental Payment and Collection system to satisfy the defendant’s criminal monetary penalties. The defendant has agreed to cover all transaction fees associated with the liquidation process. The FLP will provide Goldstein with regular updates, including an annual summary of funds collected and the remaining balance of penalties. Once 90% of the penalties are paid, these updates will shift to a monthly basis.
Upon full payment of the defendant’s penalties, any remaining ARKM tokens in USMS custody will be returned to Goldstein within 30 days, to be held for the defendant’s benefit. If the liquidation results in excess funds beyond the required penalties, those funds will be refunded to the defendant per the Clerk of the Court’s standard procedures for overpayments.
The defendant has also agreed to release the government and its agents from any claims or liabilities related to the liquidation process, including any issues arising from liquidating tokens in excess of the penalties owed.
Judge Chhabria’s order formalizes the process, ensuring the USMS oversees the custody, liquidation, and distribution of the cryptocurrency assets to fulfill the defendant’s obligations as outlined in the court’s prior orders.
Please contact BlockTribune for access to a copy of this filing.
