Crypto Hedge Fund fired its co-founder over this allegation

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BKCoin co-founder Kevin Kang embezzled funds from investors, so the crypto hedge fund fired him. The firm has deleted its official Twitter account.

BKCoin Capital, a cryptocurrency hedge fund, has fired its co-founder Kevin Kang. There is an ongoing case in Florida district court that alleges Kang misused $12 million in investor assets.

According to documents filed with the US Circuit Court in Florida, crypto hedge fund BKCoin fired its co-founder in October for allegedly embezzling $12 million in assets from three multi-strategy funds. The documents, in the 11th Circuit Court covering Miami-Dade County, date back to Oct. 28 but have gone largely unnoticed.

Crypto hedge BKCoin was founded in 2018 by Carlos Betancourt and Kang. According to a Business Insider profile in June, they claimed $150 million in assets. The company manages at least five funds including three multi-strategy funds and several separately managed accounts.

Additionally, the multi-strategy funds at the heart of the court case have six U.S. and foreign companies as investors, who have together invested more than $18 million. According to court documents, they now hope to recover.

Additionally, on October 28, its main legal entity, BKCoin Management LLC, filed a lawsuit with the circuit court. The filing alleged that Kang misappropriated and/or improperly mixed $12 million in cash and other assets from the multi-strategy funds. Then crypto coverage terminated Kangs’ employment on October 14, but was unsure if he still had access to the accounts.

It should be noted that the crypto hedge has filed an emergency motion for a receiver, a court-appointed neutral party who is given custody of the disputed assets.

BKCoin claimed that it lacked the financial or human resources to manage the funds itself. After that, Michael I. Goldberg, an attorney with Ackerman LLP, was quickly appointed temporary receiver to oversee and liquidate the funds.

In Goldberg’s preliminary investigation, the assets meant that capital deposited in the multi-strategy funds on behalf of investors was immediately transferred to the accounts of three affiliated legal entities and combined with their assets. And those entities were BKCoin Management LLC, BKCoin Capital LP and BK Offshore Fund Ltd which would at one point have been under the control of Kangs.

The court broadened Goldberg’s view to cover these entities, then affirmed its authority to transfer any crypto assets to a custodial account and/or liquidate (or convert the cryptocurrency to US dollars), if necessary to preserve value.

Now Goldberg must submit a report to the court by January 4. It should describe the actions taken, as well as the amounts of all assets and liabilities of the funds and affiliated entities and whether it believes the funds could continue to operate legally and profitably.

Andrew is a blockchain developer who developed his interest in cryptocurrencies during his post-grad studies. He is a fine observer of details and shares his passion for writing while being a developer. His backend blockchain knowledge helps him bring a unique perspective to his writing

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