$100 Million Crypto Scam: SEC Sues BKCoin for Alleged Fraud
The Securities and Exchange Commission (SEC) continues its enforcement action against the crypto industry, filing an emergency action against Miami-based crypto hedge fund BKCoin and its head Kevin Kang.
According to the SEC complaint, the hedge fund launched in 2018 by co-founders Carlos Betancourt and Kevin Kang raised $100 million from more than 55 investors to invest in crypto assets, leading Kevin Kang to make “Ponzi-like payments”. Used to. and for personal use. Eric Bustillo, director of the SEC’s Miami regional office, said:
As we allege, investors handed over their money to the defendants to trade in crypto assets. Instead, the defendants embezzled their funds, forged documents, and even engaged in Ponzi-like conduct.
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The SEC’s filing against the Miami-based crypto hedge fund alleges that BKCoin and its head Caving Kang “violated” antifraud provisions of the federal securities laws. According to the SEC filing, BKCoin and Kang guaranteed investors that the funds would be used to trade crypto assets and generate more profits for BKCoin through its separately managed accounts and five private funds.
In addition, Kang and BKCoin allegedly used more than $3.6 million to make “Ponzi-like” payments to fund investors. In this regard, the SEC alleges that Kang “embezzled” more than $371,000 in investor funds to pay for vacations, sporting event tickets, and a New York City apartment.
According to the SEC’s complaint, Kevin Kang altered investor documents with “inflated” bank account balances for a third-party administrator for some of the capital raised since the crypto hedge fund’s launch.
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The complaint also alleges BKCoin misrepresented to its investors that the crypto hedge fund or any of the four funds had received an audit report from a “top four” auditor when, according to the SEC, any fund Audit report not received, anytime between 2018 and 2022.
According to the filing, the SEC’s enforcement action seeks a “permanent injunction” against BKCoin and Kevin Kang, disgorgement, prejudgment interest and a civil penalty against both parties. Eric Bustillo concluded:
This action highlights our continued commitment to protecting investors and eliminating fraud in all securities sectors, including the crypto asset sector.
BKCoin co-founder Kevin Kang was previously fired by BKCoin’s main legal entity, BKCoin Management LLC, on October 8 for allegedly misappropriating $12 million in assets from three multi-strategy funds, BKCoin Legal for Miami According to an Oct. 28 filing by the entity- Dade County in the state of Florida.
The total market cap is still below the trillion-dollar mark on the daily chart. Source: Total TradingView.com
The global cryptocurrency market capitalization currently stands at $985.9 billion, still well below the trillion-dollar mark since last week’s Silvergate controversy. Today, BTC has a market cap of $432 billion, dominating 40.36% of the sector.
On the other hand, the stablecoin market cap is $136 billion, with a share of 12.7% of the total crypto market capitalization.
Featured image from Unsplash, chart from TradingView.com