The US Securities and Exchange Commission (SEC) recently filed an emergency action against the Miami-based financial advisor firm BKCoin Management LLC and its Co-Founder Kevin Kang, alleging that they defrauded investors of $100 million through a fraudulent crypto scheme. The SEC seeks to impose financial penalties and a conduct-based injunction against Kang.
The SEC claims that BKCoin raised $100 million from at least 55 investors between October 2018 and September 2022, promising significant returns on the investment. However, the defendants allegedly used $3.6 million of the total sum to make Ponzi-like payments, and Kang supposedly stole over $370,000 to pay for holidays, sporting events tickets, and a property in New York City. The SEC also alleges that BKCoin lied to investors that it received an audit opinion from a “top four auditor” when, in fact, it never obtained such a notion.
In addition, the SEC has previously charged eight individuals and several entities of draining $45 million from investors via a fraudulent cryptocurrency scheme named CoinDeal. The SEC claims that the suspects used the sum to purchase properties, cars, and a boat, and falsely claimed access to valuable blockchain technology, promising investment returns of more than 500,000 times for investors. One of the defendants, Neil Chandran, was previously arrested by the US Department of Justice for offenses related to wire fraud and handling illegal money transactions, and the SEC has insisted that he should be a subject of a conduct-based injunction.
The SEC’s emergency action against BKCoin Management LLC and its Co-Founder Kevin Kang is a reminder of the agency’s commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena. The SEC has frozen some assets belonging to BKCoin, and is seeking permanent injunctions against both defendants, as well as disgorgement from Bison Digital LLC.