Crypto Advisor Sued For $100 Million Ponzi Scheme

The US stock market watchdog SEC (Securities and Exchange Commission) continues its series of repressive actions against crypto companies and seems determined to arrest fraudsters. After the debacles surrounding FTX and the Silvergate bank, the SEC is clearly not prepared to miss another crypto scandal. This time, started a lawsuit against crypto platform BKCoin which it accused of defrauding its own investors for about $100 million.

BREAKING: ​SEC shuts down ‘$100 Million #BKCoin crypto fraud’ in Miami

— whalechart 🐳 (@WhaleChart) March 6, 2023

100 million dollars

According to the SEC, BKCoin sold crypto to investors under the guise of funding the development of their own crypto exchange platform. However, the SEC now says the company never even launched a platform nor did it comply with applicable regulations in the United States. Even worse, the money would have been embezzled for personal purposes. A kind of Ponzi fraud scheme, but with crypto coins if you will.

Today we announced that we successfully obtained an asset freeze, appointment of a receiver, and other emergency relief against Miami-based investment adviser BKCoin Management LLC and Kevin Kang, in connection with a crypto asset fraud scheme.

— U.S. Securities and Exchange Commission (@SECGov) March 6, 2023

According to the complaint against BKCoin and its founder Kevin Kang, the company also allegedly exaggerated the number of users and transactions on its platform in order to attract even more investment.

Crypto hedge fund BKCoin and its co-founder, Min Woo “Kevin” Kang, made “Ponzi-like” payments and misused investor funds, the US SEC alleged in a lawsuit https://t.co/N0Hv2HcmhA

— Bloomberg Markets (@markets) March 6, 2023

The complaint also alleges that Kang used at least $371,000 of the money for personal expenses such as vacations, tickets to sporting events and a New York apartment. He tried to cover up the unauthorized use of the money by amending documents showing “inflated bank account balances to the third-party administrator,” the SEC said.

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