BKCoin Management And Its Principal Face SEC Charges: Potential Ponzi Scheme, Inflated Bank Balances And More

The U.S. Securities and Exchange Commission (SEC) has taken emergency action against BKCoin Management and its principal, Kevin Kang, following their alleged involvement in a cryptocurrency fraud scheme.

What Happened: The SEC alleged BKCoin, which is based in Miami, and Kang raised $100 million from at least 55 investors between October 2018 and September 2022, but instead of investing in crypto assets, they used some of the money to make Ponzi-like payments and for personal use.

Kang also allegedly misappropriated $371,000 of investor money for personal expenses and tried to conceal the unauthorized use of investor money by providing altered documents with inflated bank account balances to the third-party administrator for certain of the funds.

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The SEC's complaint, filed in the U.S. District Court for the Southern District of Florida, seeks permanent injunctions against both defendants, disgorgement, prejudgment interest and a civil penalty from both defendants, and an officer and director bar and conduct-based injunction against Kang.

The complaint also named relief defendants, including each of the funds and Bison Digital, an entity that allegedly received approximately $12 million from BKCoin and the funds.

The court has granted emergency relief against the relief defendants, including the appointment of a receiver.

The SEC's investigation is ongoing and being conducted by the Miami Regional Office.

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Photo: Andrey Burmakin via Shutterstock