Crypto Fund Ikigai Fined $150K for Bitcoin Loan Mismanagement

Bitcoin Crypto Regulations

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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August 21, 2024 01:11 EDT

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The US National Futures Association (NFA) imposed a $150,000 fine on crypto fund Ikigai Strategic Partners for misuing a Bitcoin loan, according to a panel decision on Aug. 20.

The fine results directly from the broader financial turmoil that hit the crypto sector after FTX’s dramatic downfall in 2022. This event exposed vulnerabilities within the crypto market. It also prompted regulatory bodies like the NFA to extend their oversight into previously less-regulated areas.

Ikigai Strategic is accused of allowing the Ikigai Opportunities Master Fund Ltd. to improperly move assets. The fund, which it manages, allegedly transferred assets to another entity under fund principal Anthony Robert Emtman and another associate’s control.

Ikigai Accused of Mixing Funds and Inadequate Oversight

The accusation against Ikigai includes allowing the master fund to mix its resources with those from another pool. An unaffiliated entity managed this other pool. The fund was also criticized for failing to adequately oversee its business activities and staff.

The complaint also stated that Ikigai used Bitcoin from its main fund as collateral for a $1.3m loan. The loan was made to another related fund, Ikigai Capital Partners GP LLC. This move complicated their financial management and investor obligations. After the NFA’s findings, Ikigai Strategic Partners and its principal agreed to the fine without admitting to the allegations.

Heavy Losses in FTX Failure

Ikigai has earlier revealed that it invested a large portion of its assets in now-defunct FTX. The fund admitted that it managed to recover very little before the exchange collapsed.

Although Ikigai suffered one of the biggest losses relative to its size due to the FTX failure, it wasn’t the only firm affected. Other major companies, including CoinShares, Multicoin Capital, Amber Group, and Genesis Trading, also acknowledged their financial exposure to FTX, which has since declared bankruptcy.