The Securities and Exchange Commission (SEC) continues its enforcement actions against the crypto industry, filed emergency action against Miami-based crypto hedge fund BKCoin and its principal Kevin Kang.
According to the SEC complaint, the hedge fund, which was launched in 2018 by co-founders Carlos Betancourt and Kevin Kang, raised $100 million from more than 55 investors to invest in crypto assets, which the principle Kevin Kang used to “make Ponzi-like payments. and for personal use.” Eric Bustillo, director of the SEC’s Miami Regional Office, said:
As we have shown, investors hand over money to the defendants to trade crypto assets. Instead, the defendants embezzled money, forged documents, and even acted like a Ponzi.
Has BKCoin Done The Biggest Scam In The Industry?
The SEC filing against the Miami-based crypto hedge fund alleges that BKCoin and its principal, Kevin Kang, “violated” antifraud provisions of federal securities laws. According to the SEC filing, BKCoin and Kang assured investors that the money would be used to trade crypto assets and generate more revenue for BKCoin through managed accounts and five private funds.
In addition, Kang and BKCoin allegedly used more than $3.6 million to make “Ponzi-like” payments to investor funds. In this regard, the SEC alleges that Kang “misappropriated” more than $371,000 in investor funds to pay for vacations, sporting event tickets, and a New York City apartment.
According to the SEC’s complaint, Kevin Kang turned over investor documents with “inflated” bank account balances to a third-party administrator for some of the capital he had raised since the crypto hedge fund launched.
SEC Bans Another Crypto Company
The complaint also alleges that BKCoin misrepresented to investors that the crypto hedge fund or any of the four funds had received an audit report from the “top four” auditors when, according to the SEC, none of the funds had received an audit report, at any time. between 2018 and 2022.
According to the filing, the SEC’s enforcement action seeks a “permanent injunction” against BKCoin and Kevin Kang, disgorgement, prejudgment interest, and civil penalties against both parties. Eric Bustillo concludes:
This action highlights our continued commitment to protecting investors and eliminating fraud in all securities sectors, including the crypto asset arena.
BKCoin founder Kevin Kang was previously fired by BKCoin’s core legal entity, BKCoin Management LLC, on October 8 for allegedly misappropriating $12 million in assets from three multi-strategy funds, according to October 28. filed by the legal entity BKCoin for Miami-Dade County in the state of Florida.
The global cryptocurrency market capitalization is currently at $985.9 billion, still below the trillion dollar mark lost since last week’s Silvergate battle. BTC market capitalization is currently $432 billion, dominating 40.36% of the sector.
On the other hand, the market cap of stablecoins is at $136 billion, with a share of 12.7% of the total crypto market capitalization.
Featured images from Unsplash, charts from TradingView.com