The U.S. Securities and Exchange Commission (SEC) has filed an emergency action against Miami-based investment advisory firm Bkcoin and one of its representatives, Kevin Kang.” The defendants “disregarded the fund’s structure, commingled investors’ 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 advisory firm Bkcoin and one of its representatives, Kevin Kang, for “orchestrating a $100 million crypto fraud scheme.” Securities regulators have “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 funds would be used primarily to trade crypto assets, and represented that Bkcoin would generate returns to investors through separately managed accounts and five private funds,” the securities regulator detailed, adding.
Defendants disregarded the structure of the funds, commingled investors’ assets, and used more than $3.6 million to make Ponzi-like payments to fund investors.
According to the complaint, Kang allegedly misappropriated at least $371,000 of investor funds to pay for vacations, tickets to sporting events, and a New York apartment. In addition, “Kang attempted to conceal the misuse of investor funds by providing third-party administrators of certain funds with falsified documents that inflated bank account balances,” the SEC further stated.
In addition, Bkcoin allegedly made material misrepresentations to some investors by falsely stating that it or one of its funds had received an audit opinion from a “top four auditor.” However, neither Bkcoin nor its funds actually received an audit opinion at any time.
Securities regulators alleged that Bkcoin and Kang “violated the antifraud provisions of the federal securities laws,” and the SEC is seeking a permanent injunction against both defendants, as well as disgorgement, prejudgment interest, and civil penalties. In addition, the complaint seeks an officer and director prohibition against Kang and an injunction based on his conduct.
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