Securities and Exchange Commission took legal action against Miami investment adviser BKCoin Management LLC and Kevin Kang, its principal, over a crypto-asset fraud scheme. The SEC secured an asset freezing, appointed a receiver in the case and other urgent relief. BKCoin, under the pretext of investing in cryptocurrency assets, raised $100 million between October 2018 to September 2022 from 55 investors. But the money was used to pay for personal expenses, Ponzi schemes and other payments.
According to SEC’s complaint BKCoin, Kang and other defendants assured investors their money would generate returns by trading crypto assets. The defendants ignored the fund’s structure, mixed up investor assets and spent over $3.6m on Ponzi-like payment schemes. Kang is also accused of misappropriating at least $371,000 to pay for personal expenses. Kang altered bank statements to inflate the balances of his accounts. BKCoin falsely claimed that it had received an audit opinion by a “top four auditor.”
BKCoin, and Kang are accused of violating federal securities law in the SEC complaint filed at the United States District Court for Southern District of Florida. The complaint asks for permanent injunctions as well as disgorgement, prejudgment interests, civil penalties, an officer and director’s bar and a conduct-based injunction. The complaint also names relief parties, including BisonDigital LLC and the funds. It seeks disgorgement. The court has granted an emergency order, which includes the appointment of a Receiver.
Miami Regional Office is conducting the investigation. Pascale Guerrier is the lead litigator under Teresa Verges’ supervision.
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SEC: What You Need to Know
Securities and Exchange Commission is an American regulatory agency that supervises and enforces federal security laws. Its main mission is to protect and promote investors, ensure fair and efficient markets and facilitate capital formation. The SEC achieves its objectives by regulating securities firms, such as stock exchanges, brokers-dealers and investment advisors. In addition, it requires companies to provide relevant financial information to public in order to promote transparency and to prevent fraud. The SEC also investigates and takes action against individuals and entities involved in illegal securities activities. The SEC is crucial to the stability and integrity of the U.S. Financial System.
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