SEC Files Emergency Action Against Bkcoin in $100 Million Crypto Fraud Scheme

SEC Files Emergency Action Against Bkcoin in $100 Million Crypto Fraud Scheme

The U.S. Securities and Exchange Commission (SEC) has filed an emergency action against Miami-based investment adviser Bkcoin and one of its principals, Kevin Kang. “The defendants disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors,” the SEC alleged. SEC’s ‘Emergency Action’ Against Bkcoin, Kevin Kang

The U.S. Securities and Exchange Commission (SEC) announced Monday that it has filed an “emergency action” against Miami investment adviser Bkcoin and one of its principals, Kevin Kang, “for orchestrating a $100 million crypto fraud scheme.” The securities regulator explained that “it successfully obtained an asset freeze, appointment of a receiver, and other emergency relief” against Bkcoin and Kang.

The SEC detailed that from at least October 2018 through September 2022, Bkcoin raised approximately $100 million from at least 55 investors to invest in crypto assets. “Bkcoin and Kang assured investors that their money would be used primarily to trade crypto assets and represented that Bkcoin would generate returns for investors through separately managed accounts and five private funds,” the securities regulator detailed, adding: The defendants disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors.

The complaint alleges that Kang misappropriated at least $371,000 of investor money to pay for vacations, sporting event tickets, and a New York City apartment, among other things. Furthermore, “Kang attempted to conceal the unauthorized use of investor money by providing altered documents with inflated bank account balances to the third-party administrator for certain of the funds,” the SEC further said.

Moreover, Bkcoin allegedly made material misrepresentations to some investors by falsely claiming that either the company or one of its funds had received an audit opinion from a “top four auditor.” However, neither Bkcoin nor any of its funds actually received an audit opinion at any time.

The securities regulator alleged that Bkcoin and Kang “violated the antifraud provisions of the federal securities laws.” The SEC seeks permanent injunctions against both defendants, as well as disgorgement, prejudgment interest, and a civil penalty. In addition, the complaint calls for an officer and director bar and conduct-based injunction against Kang. Tags in this story Bitcoin, crypto ponzi scheme, cryptocurrency Ponzi scheme, Kevin Kang, SEC, SEC Bkcoin, SEC crypto ponzi scheme

What do you think about this case? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. Ripple CEO Warns of Harm to Crypto Industry if SEC Wins Lawsuit Over XRP REGULATION | 1 day ago US Senators Probe Crypto Exchange Binance About "Potentially Illegal Business Practices" REGULATION | 4 days ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleBillionaire Mark Mobius Says He Can’t Get His Money Out of HSBC China – ‘They’re Putting All Kinds of Barriers’ Next articleSpain a Hotbed for Cryptocurrency Real Estate Deals, According to Study Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItCentral Bank of Brazil Confirms It Will Run a Pilot Test for Its CBDC This Year

The Central Bank of Brazil has confirmed that the institution will run a pilot test regarding the implementation of its proposed central bank digital currency (CBDC), the digital real. Roberto Campos Neto, president of the bank, also stated that this ... read more.Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Australia to List Bitcoin ETF After 4 Clearinghouse Participants Commit to Meet Stringent Margin Terms Microbt Reveals Latest Bitcoin Mining Rigs — Machines Produce up to 126 TH/s With Custom 5nm Chip Design Terra"s Algorithmic Dollar-Pegged Crypto UST Is Now the Third-Largest Stablecoin