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Cryptocurrency fund lkigai Strategic Partners agreed to pay the National Futures Association (NFA) in the United States a $150,000 fine for an allegedly illicit Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="" target="_self" text="null">BTC</a>) loan, <a data-ct-non-breakable="null" href="https://www.nfa.futures.org/BasicNet/regulatory-actions-detail-doc.aspx?docid=5264&amp;j=396093&amp;sfmc_sub=147524643&amp;l=18017_HTML&amp;u=6785524&amp;mid=100026896&amp;jb=0" rel="null" target="null" text="null">according</a> to an Aug. 20 decision by an NFA hearing panel.&nbsp;
The action is part of the ongoing fallout from the industry-wide liquidity crisis following crypto exchange FTX’s collapse in 2022. It is also the latest instance of NFA — which helps regulate the United States derivatives market — policing activities in the spot cryptocurrency markets.&nbsp;
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/national-futures-association-adds-rules-for-members-handling-digital-assets" rel="null" target="null" text="null">National Futures Association adds rules for members handling digital assets</a>
“Ikigai Strategic permitted one of the pools the firm operates to make a prohibited advance of pool assets to an affiliate that [fund principal Anthony Robert] Emtman and another Ikigai Strategic principal own,” NFA alleged in an Aug. 20 statement.&nbsp;
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 <img alt="US regulator fines crypto fund $150K for illicit Bitcoin loan" name="" src="https://s3.cointelegraph.com/uploads/2024-08/NFABTC">
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 Bitcoin declined sharply in 2022 amid the FTX crisis. Source: CoinMarketCap
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In 2022, lkigai allegedly loaned approximately $2.5 million worth of BTC to a crypto exchange to benefit another fund owned and operated by the same people who ran lkigai, <a data-ct-non-breakable="null" href="https://www.nfa.futures.org/BasicNet/regulatory-actions-detail-doc.aspx?docid=5229&amp;j=396093&amp;sfmc_sub=147524643&amp;l=18017_HTML&amp;u=6785525&amp;mid=100026896&amp;jb=0" rel="null" target="null" text="null">according</a> to the April 29 complaint. The fund held around $65 million — or 80% of its assets — on the exchange, the complaint said. It did not name the exchange.&nbsp;
As a result of the loan, which NFA says went against lkigai’s regulatory obligations, lkigai was unable to meet redemption demands from its investors, the complaint said.&nbsp;
“Ikigai Strategic used the Master Fund’s Bitcoin as collateral for a $1.3 million [US Dollar Coin] USDC existing line of credit” extended to affiliated fund Ikigai Capital Partners GP LLC, the complaint said.
According to the decision, Kigali and its principal operator agreed to pay a $150,000 fine without admitting or denying the allegations.&nbsp;
On May 31, NFA issued <a data-ct-non-breakable="null" href="https://www.nfa.futures.org/rulebooksql/rules.aspx?Section=4&amp;RuleID=RULE%202-51" rel="null" target="null" text="null">rules</a> governing the conduct of member firms operating in the spot cryptocurrency markets, including extensively regulating fraudulent and misleading claims.&nbsp;
Before the May rule issuance, the self-regulatory organization had “well over 100” members engaging in activities with digital asset commodities but no way to address fraud or misconduct committed by those members, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/national-futures-association-adds-rules-for-members-handling-digital-assets" rel="null" target="null" text="null">NFA said in a Feb. 28 letter</a>.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/wazirx-exchange-hackers-fake-tether-scams-asia-express/" rel="null" target="null" text="null">Asia Express: WazirX hackers prepped 8 days before attack, swindlers fake fiat for USDT</a>

US regulator fines crypto fund $150K for illicit Bitcoin loan

Cointelegraph

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