Fraud Allegations SEC Crypto Fraud, The United States Securities and Exchange Commission (SEC) has targeted investment adviser BKCoin Management in connection with an alleged $100 million crypto fraud scheme.
The United States Securities and Exchange Commission (SEC) alleges Miami-based BKCoin Management collected $100 million from at least 55 investors to invest in cryptocurrencies, but instead used them to buy luxury goods and engage in “Ponzi”-like actions, according to an SEC announcement Monday (6/3/2023).
The United States Securities and Exchange Commission (SEC) suspects that one of the principals of BKCoin Management, Kevin Kang, misused at least US$371 thousand of investors’ money to pay for his vacation and apartment and falsified documents.
The director of the SEC Miami Regional Office, Eric I. Bustillo said “defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct.”
“As the complaint alleges, the defendants disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors,” added the SEC announcement.
Allegations SEC Crypto Fraud. The SEC said it had frozen assets and obtained other emergency assistance for the company. The US regulator is now seeking permanent injunctions against BKCoin and Kang, repeal and civil penalties against the two defendants.
Over the years the SEC has taken a tough stance on the crypto industry. Since 2018, the SEC has targeted token sales and ICOs, a form of fundraising in crypto, as sales of unregistered securities.
The SEC, currently chaired by Gary Gensler, has intensified its scrutiny and Gensler has announced he believes essentially every coin and token, other than Bitcoin, is an unregistered security.
Numerous prominent cryptocurrency businesses have supported the US regulator’s action. In January, the SEC focused on Genesis and Gemini for selling unregistered securities. The SEC fined US cryptocurrency exchange Kraken $30 million earlier this month for breaking securities rules.