The Securities and Exchange Commission (SEC), has taken an emergency action against BKCoin Management LLC, a Miami-based investment advisor, and its principal Kevin Kang for orchestrating a $100,000,000 crypto fraud scheme. To protect investors, the SEC obtained an asset freeze, appointment as a receiver and other emergency relief.
According to the SEC complaint, BKCoin raised funds at least 55 times between October 2018 and September 2022 in order to invest crypto assets. Instead of investing the funds, BKCoin, Kang and others used the funds to make Ponzi-like payments, and for their own personal use. Kang allegedly stole at least $371,000 for vacations and sporting events tickets. Kang also allegedly used the money to buy a New York City apartment. The defendants allegedly mixed investor assets, misrepresented funds’ structure, provided false documents to third-party administrators, and allegedly made multiple fraudulent payments.
Permanent injunctions are sought by the SEC against both defendants. Disgorgement, prejudgment interests, and a civil penalty are also requested from both defendants. Kang is also subject to an officer and director ban and conduct-based injunction. The complaint also requests disgorgement from all relief defendants (including each of the funds as well as Bison Digital LLC).
“This action demonstrates our continued commitment towards protecting investors and rooting out fraud in any securities sectors including the crypto asset area,” Eric I. Bustillo said, Director of SEC’s Miami Regional Office.
Investors need to be aware of potential fraud warning signs and thoroughly research any investment opportunity that may involve crypto assets. SEC’s Office of Investor Education and Advocacy and Enforcement has issued an Investor Alert about Crypto Investment and a Pyramid Scheme that Purports to be Multi-Level Marketing Programs. Investor.gov has additional information on crypto asset investment strategies.