SEC Takes Swift Action Against BKCoin and Kevin Kang for Alleged Involvement in $100 Million Crypto Fraud

cryptonews.com:

The Securities and Exchange Commission (SEC) has announced it is taking “emergency action” against crypto hedge fund BKCoin and its co-founder Kevin Kang for “Ponzi-like conduct.”

According to a press release from the SEC on Monday, Kang’s fund raised approximately $100 million from 55 investors between October 2018 and September 2022. The investors were promised that the money would go towards buying crypto, but Kang instead used some of the money for personal expenses and to make “Ponzi-like payments,” the SEC said.

The SEC has now obtained permission to freeze the fund’s assets and take other emergency measures against the fund, which is registered in Miami, Florida.

The SEC’s complaint was originally filed on February 23, and unsealed this week.

The SEC’s complaint alleged that Kang commingled investor assets, despite promises to investors that their funds would be held in separately managed accounts and five private funds. It added that Kang used $3.6 million to make Ponzi-like payments to fund investors.

At least $371,000 of the investor’s money were used by Kang to pay for “vacations, sporting events tickets, and a New York City apartment,” the SEC further alleged.

Eric I. Bustillo, Director of the SEC’s Miami Regional Office, commented:

“As we allege, investors entrusted their money to the defendants to trade in crypto assets. Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct.”

Kang has for several years had a high profile in the crypto world, and said in a panel discussion hosted by the Financial Times in 2022 that his fund had then moved from talking with only specialized investors to more traditional asset allocators.

“When we first launched back in