(FRN - Financial Regulation News) - Securities and Exchange Commission (SEC) officials have detailed an emergency action against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang.
Per the SEC, the action resulted in a successful asset freeze, appointment of a receiver, and other emergency relief in connection with an alleged crypto asset fraud scheme.
“As we allege, investors entrusted their money to the defendants to trade in crypto assets,” SEC Miami Regional Office Director Eric I. Bustillo said. “Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct. This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena.”
The SEC complaint, filed in the United States District Court for the Southern District of Florida, alleges that BKCoin and Kang violated the antifraud provisions of the federal securities laws. They assured investors that their money would be used primarily to trade crypto assets and represented that BKCoin would generate returns for investors through separately managed accounts and five private funds.
The SEC complaint alleges the defendants disregarded the structure of the funds, commingled investor assets, and used over $3.6 million to make Ponzi-like payments to fund investors.
Additionally, the complaint alleges Kang misappropriated at least $371,000 of investor money to pay for vacations, sporting events tickets, and a New York City apartment.
The complaint seeks permanent injunctions against the defendants; disgorgement, prejudgment interest, and a civil penalty from both defendants; in addition to an officer and director bar and conduct-based injunction against Kang.
By Douglas Clark
March 8, 2023
