SEC charges BKCoin and Kevin Kang with $100M crypto fraud

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The defendants allegedly ignored the structure of the funds, mixed up the investors’ assets and used more than $3.6 million to make Ponzi-like payments to the fund investors.

The Securities and Exchange Commission has obtained an asset freeze against Miami-based investment adviser BKCoin Management LLC and one of its executives, Kevin Kang, in connection with a $100 million crypto fraud.

Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said: As we allege, investors entrusted their money to the defendants to trade crypto assets. Instead, the defendants embezzled their money, created false documents and even engaged in Ponzi-like conduct. This action underscores our continued commitment to protecting investors and eradicating fraud in all securities sectors, including the realm of crypto assets.

Around $100 million from at least 55 investors

According to the complaint, from at least October 2018 to September 2022, BKCoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but BKCoin and Kang instead used some of the money to make Ponzi-type payments and for personal use. .

The defendants allegedly ignored the structure of the funds, mixed up the investors’ assets and used more than $3.6 million to make Ponzi-like payments to the fund investors.

Kevin Kang also embezzled at least $371,000 of money from investors to pay for vacations, tickets to sporting events and an apartment in New York, among other things, the SEC said.

The BKCoin director then tried to cover up the unauthorized use of investors’ money by providing altered documents with inflated bank account balances to the third-party administrator for some of the funds, the financial watchdog alleges, adding that the company claimed to have received an audit opinion from a first four auditors”, when in fact no audit opinion was issued.

CoinDeal sued for $45 million crypto scam

The SEC recently sued several people involved in the CoinDeal crypto scam, which raised more than $45 million through the sale of unregistered securities to tens of thousands of investors worldwide.

The defendants claimed that investors could generate extravagant returns by investing in CoinDeal, a blockchain technology that would be sold for trillions of dollars to a group of large and wealthy buyers.

However, the CoinDeal sale never took place and no distributions were made to CoinDeal investors, the SEC said, adding that the defendants collectively misappropriated millions of dollars of investors’ funds for personal gain. .

The SEC accused the Trade Coin Club of a $295 million Ponzi scheme

In late 2022, the SEC announced charges against notorious crypto Ponzi fraud scheme, Trade Coin Club, a multi-level marketing program that operated from 2016 to 2018 and promised profits from the trading activities of an alleged crypto asset trading bot.

Trade Coin Club raised over 82,000 bitcoins worth $295 million at the time from over 100,000 investors worldwide. Defendants Douver Torres Braga and Joff Paradise told investors that the bot performs millions of microtransactions every second and that investors will receive a minimum return of 0.35% per day.

According to the SEC, however, Douver Torres Braga siphoned off investor funds for its own benefit and to pay off a global network of Trade Coin Club promoters, including defendants Paradise, Taylor and Tetreault. Operating as a Ponzi scheme, the investor withdrawals came entirely from deposits made by investors, not from crypto asset trading activity by a bot or otherwise, the SEC alleges, further alleging aggregate amounts received by each of the defendants:

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