The United States Securities and Exchange Commission, or SEC, has targeted an investment adviser and individual allegedly connected to a $100-million cryptocurrency fraud in its latest enforcement action.
According to a March 6 announcement, the SEC filed an emergency action on Feb. 23 against investment adviser BKCoin and one of the principals Kevin Kang, alleging the two “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 financial regulator’s complaint alleged that BKCoin raised roughly $100 million from investors to invest in crypto, but the firm and Kang diverted some of the funds for personal use.
“As we allege, investors entrusted their money to the defendants to trade in crypto assets,” said Eric Bustillo, Director of the SEC’s Miami Regional Office. “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.”
This is a developing story, and further information will be added as it becomes available.