US SEC freezes assets of BKCoin for orchestrating crypto fraud scheme

ambcrypto.com:

The United States Securities and Exchanges Commission (SEC) announced that it filed an emergency action against BKCoin Management LLC – a crypto-hedge fund. Additionally, the action extends to its co-founder – Kevin Kang. The co-founder was fired in December 2022 over allegations of misappropriating customer funds to the extent of $12 million. The commission claims that BKCoin and Kang used customers $100 million “to make Ponzi-like payments and for personal use.”

The US regulatory body stated that it has the authority to freeze the assets of BKCoin and Kevin Kang via the filed emergency action. Moreover, the commission received the appointment of a receiver and other emergency relief. In a press release, the SEC said,

“From at least October 2018 through September 2022, BKCoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but BKCoin and Kang instead used some of the money to make Ponzi-like payments and for personal use.”

The filing stated that both parties claimed to use investors’ funds to trade crypto and make returns via separate accounts and five private funds. However, BKCoin and Kang allegedly “commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors.”

Moreover, SEC alleges that Kang used investor funds for vacations, a New York City apartment, and other things. The SEC claims that these expenses came up to nearly $371,000. And, Kang covered the deficit by giving “altered documents with inflated bank account balances to the third-party administrator for certain of the funds.”

In addition, the crypto hedge fund allegedly claimed to have received an audit opinion from one of the big fours. Whereas, in reality, neither the firm nor