- The SEC files an urgent complaint against Bitcoin in a $100 million cryptocurrency fraud scheme.
‘Emergency Action’ by the SEC against Bkcoin and Kevin Kang
A $100 million cryptocurrency fraud scheme was orchestrated, according to an “emergency action” that the U.S. Securities and Exchange Commission (SEC) has filed against Miami investment adviser Bkcoin and one of its owners, Kevin Kang. It “successfully acquired an asset freeze, the appointment of a receiver, and other emergency measures” against Bkcoin and Kang, according to the securities regulator.
According to information provided by the SEC, Bkcoin received over $100 million from at least 55 investors between October 2018 and September 2022 to invest in cryptocurrency. According to the securities regulator, “Bkcoin and Kang informed investors that their money would be utilized largely to trade crypto assets and represented that Bkcoin would provide returns for investors through individually managed accounts and five private funds.”
‘’ The defendants ignored the funds’ structure and mixed investor assets and used more than $3.6 million to make Ponzi-style payments to fund investors.’’
According to the lawsuit, Kang allegedly misappropriated at least $371,000 from investors to buy trips, sports tickets, and apartments in New York City, among other things. Additionally, “Kang sought to hide the improper use of investor money by presenting altered paperwork with inflated bank account balances to the third-party administrator for certain funds,” the SEC added.
Additionally, Bkcoin is accused of deceiving certain investors by fraudulently representing that the company or one of its funds had obtained an audit opinion from a “top four auditor” to gain their business. But at no point did Bitcoin or any of its funds ever truly acquire an audit opinion.
According to the Securities Commission, Bkcoin and Kang allegedly violated the antifraud provisions of the federal securities laws. The SEC is requesting disgorgement, prejudgment interest, and a civil penalty against both defendants in addition to permanent injunctions.
The complaint says that Kang will be subject to an officer and director barring a conduct-based injunction.
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