The US Securities and Exchange Commission (SEC) filed an emergency action against Miami-based financial advisor BKCoin Management LLC and its Co-Founder Kevin Kang, alleging they misled investors of $100 million in a crypto scheme.
The government wants financial penalties for the organization and a conduct-based injunction against Kang.
The US securities regulator stated in a press statement that BKCoin raised $100 million from at least 55 investors between October 2018 and September 2022. The company and one of its founders, Kevin Kang, promised customers high returns by trading bitcoins.
However, the SEC claimed that the defendants ignored the plan and used $3.6 million to make Ponzi-like payments while Kang stole over $370,000 to pay for holidays, sports tickets, and a New York City apartment. BKCoin allegedly misled consumers by claiming to have an audit opinion from a “top four auditor” when it did not.
As we allege, investors gave the defendants money to trade crypto assets. .
“This action underscores our sustained commitment to protecting investors and eradicating fraud in all securities sectors, including the crypto asset arena,” said SEC Miami Regional Office Director Eric I. Bustillo.
The watchdog froze BKCoin assets in an emergency. It demanded permanent injunctions against the firm and Kang for violating federal securities law anti-fraud provisions. It claimed disgorgement against Bison Digital LLC, a Virtual Asset Service Provider that received $12 million from BKCoin. Eight persons, including Neil Chandran, and various businesses were accused with defrauding investors of $45 million using CoinDeal, a cryptocurrency scheme. The accused bought houses, automobiles, and a boat, it said.
“We believe the defendants falsely promised access to valuable blockchain technology and that the upcoming sale of the technology would provide investment returns of over 500,000 times for investors.”As stated in our complaint, this was all just an elaborate scam where the defendants profited themselves while cheating tens of thousands of retail investors,” said SEC Chicago Regional Office Director Daniel Gregus.
Chandran has legal difficulties before. He was arrested by the US Department of Justice for wire fraud and illicit money transfers while at CoinDeal. The SEC demanded a conduct-based injunction.
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