Key takeaways:
- In response to a $100 million cryptocurrency fraud scheme, the SEC has reportedly launched an emergency case against Miami investment adviser BKCoin.
- According to the U.S. SEC, the co-founder of BKCoin was allegedly discovered stealing investor money and using it for personal gains like vacations and apartment purchases.
There appears to be no limit to the SEC’s enforcement crusade. The SEC’s enforcement spree appears to have no end in sight. In the most recent case, the US Securities and Exchange Commission declared an emergency measure against investment adviser BKCoin Management in connection with a purported fraud scheme.
The SEC allegedly brought an enforcement action against investment adviser BKCoin and one of the principals, Kevin Kang, on February 23. The SEC claimed that Kang and BKCoin dismissed the framework of the funds, intermingled investor assets, and used more than $3.6 million to make Pyramid scheme payments to fund investors.
The defendants “mismanaged their money, produced fake papers, and even participated in Ponzi-like behaviour,” according to Eric I. Bustillo, director of the SEC’s Miami Regional Office.
Principal Kevin Kang also made up the difference by giving “amended documents with inflated bank balance sheets to the third-party administrator for some of the money.”
According to the financial watchdog, BKCoin and Kang informed their investors that their funds would be used to exchange crypto assets.
Additionally, the investment firm guaranteed that it would return investors’ money “through independently managed accounts and five private funds.” BKCoin also claimed to have gotten an auditor assessment from one of the top four auditors when in reality, it never did.
Post FTX, SEC has been proactively involved in taking corrective measures to ensure the economic landscape remains stable. The SEC complaint was the most recent enforcement action taken against a company or person engaged in cryptocurrency, alleging violations of the federal securities laws’ antifraud provisions. The regulator stated that the SEC intended to pursue a permanent injunction against both BKCoin and Kang and disgorgement, prejudgement interest, and a civil penalty against both parties.
According to Bustillo, the latest action emphasises the firm’s ongoing dedication to safeguarding investors and eradicating misconduct in all securities sectors, including the crypto asset realm.
