To make matters worse, the scammers reportedly tried to hide their fraud by issuing additional coins and claiming to have a new exchange deal that 'conveniently' made it a bad idea for customers to redeem their holdings.

This isn't the only case in the pipeline. The CFTC had already filed fraud charges against three other operators the week before. However, it illustrates the shadiness that still pervades cryptocurrency startups. While many initial coin offerings are sincere efforts, some are questionable cash grabs -- and in the most extreme circumstances, they're outright rip-offs or prone to theft. Continued crackdowns like this might deter some perpetrators, but it may be hard to completely eliminate as long as cryptocurrency values are through the roof.