The United States Securities and Exchange Commission (SEC) has filed an emergency action against Miami investment adviser BKCoin and its principal, Kelvin Kang, over a crypto scheme that defrauded millions from investors. 

U.S. SEC Goes After BKCoin for $100M Crypto Fraud

The SEC said it conducted emergency action against the firm on Tuesday, successfully freezing its account and appointing a receiver for the assets.

In a complaint filed by the SEC, the securities watchdog accused BKCoin and Kang of allegedly defrauding investors of $100 million and spending the funds on Ponzi-like investments and some for personal use. 

Between October 2018 and September 2022, BKCoin and Kang raised $100 million from over 55 investors. They assured investors the money was for crypto trading and returns would be reimbursed through separately managed accounts and five private funds. However, BKCoin and Kang broke the contract agreements and made away with investors’ funds.

BKCoin and Kang Squander Investor Funds

In a similar fashion to Sam Bankman-Fried’s FTX loot, Kang misused the funds realized from investors. He used $3.6 million to fund crypto Ponzi schemes. Kang also spent $371,000 from the funds on vacations, sporting events, and renting an apartment in New York City.

As stated in the complaint, Kang altered BKCoin’s documents and inflated bank account balances to cover up his unauthorized spending of investor cash. The chief executive officer also lied to some investors that the firm and some funds received an audit opinion from a top auditor.

Director of SEC’s Miami Regional Officer, Eric I. Bustillo, said, “This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena.”

SEC Seeks Funds Regurgitation

The SEC has requested in the filing that BKCoin and Kang repay the money they illegally spent. The U.S. regulator also seeks to have the defendants repay with interest and face the full weight of the anti-fraud provision of the federal securities law.

According to the filing, Bison Digital LLC, a virtual asset service provider, is also linked to the scheme. The SEC also seeks the full reimbursement of the $12 million received from BKCoin and Kang.

Elendu Benedict

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