The United States Securities and Exchange Commission (SEC) has launched urgent action against BKCoin for alleged cryptocurrency fraud. The SEC has announced that BKCoin and its director, Kevin Kang, have raised approximately $100 million from 55 investors.
Ponzi accusation from SEC to crypto money company BKCoin
The United States Securities and Exchange Commission (SEC) has filed an emergency lawsuit to confiscate the assets of Miami-based investment advisor BKCoin Management LLC and its director, Kevin Kang, over their links to a cryptocurrency fraud scheme. The financial regulator said in a March 6 press release that BKCoin has raised nearly $100 million from 55 investors. The SEC also added:
BKCoin and Kang used some of the money to make Ponzi-like payments and personalize.
The SEC said BKCoin’s actions were a violation of the anti-fraud provisions of federal securities laws. The financial regulator claimed that BKCoin and Kang have told their investors that their investments will be used for crypto-asset trading. The investment firm also promised to provide returns for investors ‘through separate managed accounts and five private funds’.
SEC seeks injunctive relief and various penalties against defendants
The regulator claimed that BKCoin and Kang ignored the fund structure, pooled investors’ funds and used $3.6 million to make Ponzi-like payments to investors. Alongside this, Kang was also accused of embezzling around $371,000 of investors’ money. According to the SEC, Kang used the money to pay for vacations, tickets to sporting events, and an apartment in New York City.
The SEC noted that Kang sought to conceal this fraudulent use of investors’ funds by “providing a third-party administrator with documents that were exchanged with inflated bank account balances.” Meanwhile, BKCoin added the lie that it has obtained auditor opinions from the top four auditors, although it has not received such an opinion at any time. Eric I. Bustillo, regional director of the SEC’s Miami office, said:
Investors have entrusted their money to the defendants for cryptocurrency trading. Instead, the defendants misused their money, forged documents, and even engaged in Ponzi-like behavior. This action highlights our continued commitment to protecting investors and eliminating fraud across all securities industries, including the cryptocurrency arena.
As we have reported on cryptokoin.com, the SEC is seeking permanent injunctive relief, dismissal and civil penalties against the defendants. Furthermore, the SEC underlined that Bison Digital LLC allegedly received approximately $12 million from BKCoin. The SEC said the court had authorized him to file emergency relief actions against this firm and to appoint a buyer.
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