- BKCoin collected almost $100 million from at least 55 investors.
- The defendants utilized over $3.6M in investor money to make Ponzi-like payments.
For masterminding a $100M crypto fraud scheme, the U.S. Securities and Exchange Commission (SEC) stated Monday that it had filed an “emergency action” against Miami investment advisor BKCoin and one of its owners, Kevin Kang. “It successfully obtained an asset freeze, the appointment of a receiver, and other emergency relief,” the securities regulator said of its actions against BKCoin and Kang.
According to the SEC, between at least October 2018 and September 2022, BKCoin collected almost $100 million from at least 55 investors to put into crypto assets. The securities regulator said that BKCoin and Kang informed participants that their money would be utilized largely to trade crypto assets and that BKCoin would create profits for investors via independently managed accounts and five private funds.
Violated Antifraud Provisions
The defendants utilized over $3.6 million in investor money to make Ponzi-like payments to investors in the funds without regard to the funds’ structure or the investors’ assets.
The lawsuit claims that Kang stole at least $371,000 from investors and used it to buy a New York City flat, go on lavish holidays, and pay for tickets to sports events. In addition, Kang sought to hide the improper use of investor money by presenting changed documentation with exaggerated bank account balances to the third-party operator for some of the funds, the SEC said.
The securities agency said that BKCoin and Kang “violated the antifraud provisions of the federal securities laws.” The SEC is asking for disgorgement, prejudgment interest, and a civil penalty in addition to permanent injunctions against both defendants. The case also asks for an injunction based on Kang’s actions and a prohibition from serving as an officer or director.
