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Miami-based advisor BKCoin Management and its co-founder Kevin Kang accused of massive Crypto fraud by SEC

Crypto

The Securities and Exchange Commission (SEC) has accused Miami-based advisor BKCoin Management and its co-founder Kevin Kang of running a crypto asset fraud scheme that raised approximately $100 million from at least 55 investors. The SEC filed an emergency action, resulting in an asset freeze and the appointment of a receiver, against the company and Kang in connection with the alleged fraud.

According to the SEC, BKCoin falsely told investors that their money would be used primarily to trade crypto assets and yield returns through separately managed accounts and five private funds. However, the regulator alleges that from October 2018 to September 2022, BKCoin raised the funds and used some of the money to make Ponzi-like payments to some investors. The company also spent $371,000 of client money on personal expenses, including vacations, sporting event tickets, and a New York City apartment.

The SEC claims that BKCoin and Kang disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors. The regulator also accused the company and Kang of using fake documents with inflated account balances to hide the scheme from a third-party administrator for certain funds.

The scheme started to collapse in October 2022 when BKCoin suspended Kang and notified investors that it was suspending redemption requests and capital withdrawals from the BKCoin funds. Tens of millions of the nearly $100 million raised are unaccounted for, according to the SEC.