• The U.S. Securities and Exchange Commission (SEC) has filed an emergency action against Miami-based investment adviser Bkcoin and one of its principals, Kevin Kang.
• The SEC alleged that 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.
• The securities regulator also alleged that Kang misappropriated at least $371,000 of investor money for personal use and attempted to conceal this unauthorized use by providing altered documents with inflated bank account balances.
SEC Files Emergency Action Against Bkcoin
The U.S. Securities and Exchange Commission (SEC) has filed an emergency action against Miami-based investment adviser Bkcoin and one of its principals, Kevin Kang. The SEC alleged that from at least October 2018 through September 2022, Bkcoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but disregarded the structure of the funds and commingled investor assets instead.
Misuse Of Investor Funds
The complaint alleges that Kang misappropriated at least $371,000 of investor money to pay for vacations, sporting event tickets, and a New York City apartment among other things. Moreover, Bkcoin allegedly made material misrepresentations to some investors by falsely claiming that either the company or one of its funds had received an audit opinion from a „top four auditor“. However, neither Bkcoin nor any of its funds actually received an audit opinion at any time.
SEC’s Allegations
The SEC seeks permanent injunctions against both defendants as well as disgorgement, prejudgment interest, and a civil penalty. In addition, the complaint calls for an officer and director bar prohibiting Kang from acting as an officer or director of any issuer that has a class of securities registered with the Commission or subject to Section 12(g)of the Exchange Act or is required to file reports under Section 15(d)of the Exchange Act .
Remedies Sought By SEC
The SEC seeks permanent injunctions against both defendants as well as disgorgement plus prejudgment interest on all ill-gotten gains related to their violations; a civil penalty; an order prohibiting Mr. Kang from acting as an officer or director for any issuer with a class of securities registered with SEC; return of all remaining assets held by Defendants; forfeiture; rescission offers made available to certain investors; and such other equitable relief deemed appropriate by Court .