The U.S. SEC has filed an emergency motion in opposition to BKCoin Administration LLC and its principal, Kevin Kang, for allegedly orchestrating a $100 million crypto fraud scheme.
The SEC obtained an asset freeze, appointment of a receiver, and different emergency reduction in opposition to the Miami-based funding adviser and Kang in reference to the crypto asset fraud scheme.
SEC: BKCoin and Kang made $3.6 million in Ponzi-like funds
In response to the SEC’s complaint, BKCoin raised round $100 million from not less than 55 traders to spend money on crypto property from October 2018 to September 2022. BKCoin and Kang allegedly used some cash to make Ponzi-like funds and for private use as a substitute of investing in crypto property, as they promised traders.
The grievance, which additionally just lately launched an investigation on lido, alleges that BKCoin and Kang disregarded the construction of the funds, commingled investor property, and used greater than $3.6 million to make Ponzi-like funds to fund traders.
It additionally alleges that Kang misappropriated not less than $371,000 of investor cash for private use, together with holidays, sporting occasion tickets, and a New York Metropolis house.
Kang tried to cover the inappropriate use of investor cash by offering cooked audits with inflated financial institution reserve accounts to the third-party administrator for sure funds.
The watchdog additional stipulates that BKCoin tricked some traders and that BKCoin, or one of many funds, obtained validation from a “high 4 auditor,” which was not the case.
SEC requests Bison Digital LLC to present again funds
The lawsuit filed by the SEC calls for everlasting injunctions in opposition to BKCoin and Kang, disgorgement, prejudgment charges, a civil high quality from each defendants, and an officer and director ban for Kang, along with a conduct-based injunction.
The grievance names reduction defendants and seeks disgorgement from every of the funds and Bison Digital LLC, which allegedly obtained round $12 million from BKCoin and the funds.
The SEC’s present investigation is led by Glenn S. Gordon, Jessica M. Weissman, and Fernando Torres within the Miami Regional Workplace, with help from James Richardson, Jean Cabot, and Adrian Gonzalez. Beneath Teresa Verges’s course, Pascale Guerrier is accountable for litigation for the SEC.
This newest SEC motion reminds traders to train warning when investing in crypto property and to be vigilant in opposition to fraudsters who reap the benefits of the rising recognition of digital property.
The SEC has issued Investor Alerts on Digital Asset and Crypto Investment and Pyramid Schemes Posing as Multi-Degree Advertising Packages, guiding traders to assist them keep away from falling prey to fraud. The SEC continues to watch the crypto asset enviornment and take enforcement motion in opposition to dangerous actors.